When facing the prospect of eminent domain, the government takeover of your property for “public use”, your options may at first seem quite limited. However, the government must make a fair, or just, offer for the use of the property. This could mean making a decent profit when it happens or not, depending on the eminent domain value of the property.
You may be wondering how eminent domain value is determined. You may be asking what measures are being taken to ensure that the owners are being given fair, or just, compensation for their property. Unfortunately, these questions and more are not simple to answer. You cannot just go to some real estate website and find out what your eminent domain value is. Even so, there are some basic guidelines to help you approximate your “true” value.
Use of Land : A property that is subject to eminent domain does not necessarily mean that the owners will have to move off their residence. Indeed, many cases of eminent domain involve the right of passing roads, telephone and power lines through a property, which may miss the residence entirely. In such cases, the eminent domain value is determined by the actual portion of the property being used. For example, if you property is worth $100,000.00 and a road will cut across your acreage on one corner, then you will be compensated for the amount of the property that was used based on fair market value. If it is 1%, you would be given an offer of $1,000.00 for compensation, based on the example we mentioned.
Fair Market Value : If your entire property is being taken over and you have to move, then the eminent domain value should match the full, fair market value of your property. This value is generally determined by assessors who perform a property survey. They look at the value of the home, as well as the value of the other surrounding homes and the area where the property resides.
This is important because if the fair market value of the property took into account the fact that it was all going to be a highway, it would drop considerably. Therefore, the value must be assessed as if the property and the surrounding neighborhood were going to remain the same. Generally, this is usually the single biggest point of dispute between the property owner and local government besides the takeover of the land itself. Calculating the proper value of the property can cause problems for one, or even both parties involved, especially if the property is in a distressed area such as a flood zone. If the property is in a distressed area, it would make it more difficult for the owners to receive just value.
Essentially, eminent domain value is calculated from the last government assessment of the property. Usually the property owners seek out a newer assessment in the hopes that the value has risen since the last government assessment. Ultimately, eminent domain value can fluctuate greatly; because of this, it is important to understand what really affects the final value of the property and be ready for whatever comes your way.