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Fee Appraisers

The Missouri Department of Transportation requested a survey of the other states regarding pre-approval process of fee appraisers for DOT and Local Agency contract appraisal work.

Appraisers are placed on the list after a review of their qualifications and work samples. Appraisers are approved for Residential, General (all appraisal assignments) and Review assignments. Appraisers are evaluated after each contract with the DOT. Occasionally appraisers are removed from the list for poor quality or timeliness. Missouri is looking for ways for the property owner to have more input into the appraiser selection process. Missouri is considering changes to the appraiser-list process that would include allowing affected property owners to choose their own fee appraiser. Although this may only be practical for total residential acquisitions, we are looking for options.

  1. If your state uses a list of approved appraisers for DOT and Local Agency contract work or other methods, do you have successes, failures or better processes you would be willing to share?

  2. What accommodations involve the property owner in your appraiser assignment process?

  3. f your state allows owners to choose an appraiser, do you make any requirements or restrictions? Does the agency then contract with this appraiser to use their services and valuation through the condemnation process?

  4. If your state allows owners to choose any certified appraiser, do specific appraisers solicit owners for assignments? Are other problems created?

  5. If your state allows the property owner to select an appraiser, is this the only valuation being done or does the agency have its own independent appraisal?

  6. If your state agency reviewer doesn't agree with the selected appraiser's conclusion or changes the valuation, are additional problems reconcilable?

  7. Does the involvement of the owner in appraiser selection appear to reduce the number of condemnation cases? Does it appear to increase the amount of the initial offer?

  8. Is there impact on the use of staff appraisers?

ALASKA

Alaska DOT does not maintain an approved appraiser list. When property needs to be acquired, we select appraisers that hold Alaska's "General Appraisal Certification" - there are no other requirements. The pool of appraisers in Alaska is quite small, we would consider using appraisers from the lower 48 states if they have the General Appraisal Certification.

Property owners may hire their own appraiser - AKDOT will consider their appraisal report along with the report contracted by the department.

ARIZONA

  1. ADOT utilizes a list of approved appraisers. The list is developed via a request for proposals (RFP), a contract, based upon merit, is awarded and these appraisers are placed on the Departments approved appraiser list. This list stays in place for up to 5 years. When an appraisal is needed several appraisers on the approved list are solicited and a purchase order for an appraisal given to the low bidder. This is the process imposed upon the Department by law.

  2. Other than the requirement that the appraiser contact the property owner prior to the property inspection no accommodations are made.

  3. The selection of the appraiser is made on the basis of cost. The property owner does not participate in this process.

  4. Owners do not participate in the selection process. The Departments approved appraisers do not (and can not) solicit work from property owners. An exception is if the property owner desires to make a counter offer to the States original written offer. See answer to question 5.

  5. The Department does not allow the owner to select the appraiser. The Department will allow the owner to select an appraiser from our approved list (or otherwise) in order to make a counter offer to the Department. This is after the original appraisal is prepared, reviewed and written offer is made to the property owner.

  6. The states reviewer does not change valuations from the States original appraisal. If the reviewer does not agree with the original appraisal a second appraisal may be ordered and this then becomes the appraisal upon which the offer is made. If the property owner submits additional information (new sales, another appraisal, or a contractors cost estimate) the reviewer may make a revised offer to the property owner. This is done after the original offer is made.

  7. This question is not applicable to the Department.

  8. Yes. Positive impact: the appraisal can be obtained faster than via the contracting process. Additional impact: the States Attorney General does not go to trial with a staff appraisers appraisal.

CALIFORNIA

  1. California uses staff appraisers for its appraisal needs, and the Local Public Agencies are responsible for hiring their own consultants. Expert witness appraisers are sometimes hired for condemnation trials. Expert witness appraisers are selected by our eminent domain attorneys based on an evaluation of their products in relation to partial acquisition valuations and other skills particular to eminent domain appraising as well as general appraisal expertise. The following language appears on the Caltrans web page:

    Caltrans is soliciting Letters of Interest from qualified individuals or firms that may lead to contracts to provide specialized expertise as an expert witness in lawsuits, arbitrations and/or litigation involving Caltrans. Submission of Letters of Interest is on-going. Letters of Interest will be evaluated by Caltrans' Legal Division; those judged best qualified will be placed in a pool of qualified providers.

  2. None in the assignment process.

  3. The owner always has the option to hire their own appraiser at their expense, but that appraisal is considered supplemental. It does not document or set just compensation. We use either the staff appraiser or an expert witness for condemnation.

  4. N/A

  5. See #3.

  6. We do not review the owner's appraisal since it is supplemental and neither documents nor sets just compensation.

  7. N/A

  8. N/A

CONNECTICUT

  1. Once a fee appraiser meets our minimum qualifications, & complies with various other requirements, they are placed on our approved list. If their product proves to be habitually problematic, there is no easy way to remove them from our list. Usually, we just do not contact them for future assignments.

  2. The property owner is contacted by the assigned appraiser & afforded the opportunity to accompany him/her.

  3. N/A

  4. N/A

  5. N/A

  6. I do not understand your question. If you mean what do we do if our reviewing appraiser does not find the appraisal to be acceptable, we first try to work with the appraiser to make it so. If this does not work, we normally have a second appraisal done, be it by fee or by staff.

  7. N/A

  8. If you mean does hiring fee appraisers affect the number of staff assignments, the answer is yes. But availability of staff, combined with Departmental commitments, requires us to go to fee.

DELAWARE

  1. Every three years we go out for a request for proposal and receive bids from interested appraisers. This is the only way we can do it. We only get a response form about 25 out of a few thousand appraisers.

  2. If a property owner requests a certain appraiser and he is on our list and can fit the appraisal in within our time frame we will use him/her. We also accept any type of appraisal the owner may receive to review.

  3. Yes if we choose an appraiser of the owner's liking we will contract and pay for the work.

  4. N/A

  5. It works either way. If we both could have used the appraiser selected we will only go with one appraiser. Sometimes the estimated value will dictate we obtain two appraisals

  6. Yes

  7. It may increase the initial offer a little, but I believe it also brings us to an agreement faster.

  8. None

FLORIDA

  1. The requirements of our Pre-approved Appraisers List are very fundamental. They require 1) the appraiser to be a Certified General Appraiser, 2) have at least 3 years of Eminent Domain Experience, and 3) have Errors and Omissions Insurance of not less than $100,000. Beyond this it is left at the hiring authority's discretion as to what additional qualification requirements they wish to apply. The objective is not to hire the "highest" qualified appraiser, but rather to match the expertise of the appraiser to the complexity of the project.

  2. Typically there is no special provision; the selection is an independent process controlled by the agency. However, in one recent case, one of our districts had several whole takings of single-family residences. The district contacted the property owners and offered them the opportunity to hire their own Residential appraiser with the understanding that the Department would reimbursement them any reasonable appraisal fee upon settling with the owner. The approach worked very well: however, keep in mind that these were non-complex takings.

    In Florida a property owner subject to a taking may hire their own appraiser to represent their position and seek and receive reimbursement for reasonable costs. Regardless, FDOT will procure its own appraisal.

  3. The property owner may hire any appraiser for their own purposes, but the FDOT will hire its own independent appraiser for the purposes of negotiation and, if necessary, condemnation.

  4. Not to my knowledge. Oftentimes the property owners hire an attorney and the attorney then hires their own appraiser.

  5. FDOT will procure its own appraisal regardless of the actions of the property owner.

  6. If this were the case FDOT would either have the reviewer prepare a report an conclude to a value or hire a second independent appraiser.

  7. N/A

  8. No. FDOT contracts for their appraiser which is typically review in-house by staff review appraisers.

GEORGIA

  1. We use a list of approved appraisers for both DOT and Local Government projects. We hold open enrollment; new appraisers wishing to be placed on our roster attend a one day seminar where they receive our approved formats and information for appraisers. They are then assigned a demonstration project consisting of five to ten parcels. These parcels are reviewed and if their final product meets our standards they are placed on our approved roster at the entry level. Our roster consists of four levels of complexity which all appraisers work through.

  2. All appraisers must contact the property owner and schedule a time for the owner to accompany them on the inspection process. This contact may consist of a telephone call or if they can not be contacted a letter offering the opportunity is sent by certified mail.

  3. We do not allow the owners to choose the appraiser.

  4. N/A

  5. N/A

  6. N/A

  7. N/A

  8. N/A

IDAHO

  1. It sounds like Missouri uses basically the same process we use where we require applications, demonstration reports, a rating committee to assign a class rating I, II, III of the appraiser. We only put on Certified General Appraisers where our projects generally cover more than just residential properties. We do post project reviews to help on future ratings of the appraiser depending on their performance.

  2. We usually do not involve the property owner in the assignment process but sometimes have in special circumstances. We provide a choice of a few on our approved list as long as it does not interfere in our State bidding laws and we control and contract with the appraiser.

  3. Our State bidding laws are very explicit concerning the number of properties on a project and the cost of the appraisals. If the number of properties on a project exceed four parcels and the total cost of the appraisals exceed $10,000 then we have to solicit from at least 5 appraisers on the approved list. Exceptions to this requirement are if the services are available only from a single qualified source, public emergency, or upon recommendation from our legal staff. We handle the contractual process throughout the process.

  4. We handle the process and are always the client. I do not recall any appraisers ever soliciting owners for assignments. There is nothing in our laws that say a property owner cannot hire their own appraiser (they have to pay for it) for another opinion of value and of course we will consider this opinion in the review process.

  5. As stated above we contract with the appraisers and are the client but the property owner may at their own expense hire their own independently.

  6. Our reviewers have the final say in the "reviewed to just compensation" and may reject or modify the conclusion. If the reviewer inserts new comparables, adjustments, etc. then they must also be able to support this conclusion. You do run into a problem of a rejected or highly modified just compensation still being brought into evidence during the condemnation phase.

  7. In the special circumstances that we have given the property owner a choice between certain appraisers and have allowed them to pick, then I believe this has helped to settle some cases. I don't believe it makes a difference in the compensation offered or at least I hope not but I think it helps relieve the property owner's concerns about the fairness of the appraisal if they know the appraiser.

  8. Most of our projects are contracted out with fee appraisers. Our minimal staff appraisers usually are limited to surplus properties, small projects, and appraisals for acquisition of material sources, etc. appear to sometimes think our staff appraisers appraise low but this is only a conception where we know our appraisers are impartial. If the question does come up with a particular owner then we might offer the choice for another appraisal by an acceptable fee appraiser from our list. The cost of another appraisal is usually very small compared to court costs, etc. if that will get the case settled.

    ADDITIONAL: Usually during our condemnation phase, our legal section will ask for a second and sometimes a third appraisal to help support their case and may suggest a certain appraiser they are comfortable with.

IOWA

  1. Iowa, we do use a list of approved appraisers for all Iowa DOT projects and those Local Agency projects when federal aid is involved. Appraisers, including our staff, must be licensed Certified General Real Property Appraisers to perform work for us. In the case of total acquisitions of single-family residential properties, we do allow the appraiser to be a Certified Residential Appraiser.

    Appraisers who wish to provide fee services need to make application through our pre-qualification process. They must also submit examples of actual eminent domain appraisals, including at least one before and after appraisal. Iowa DOT review appraisers will critique these reports to determine the quality of the work product.

  2. We do not involve the property owner in the assignment process. However, on occasion, we have agreed to pay the reasonable cost of an appraisal prepared by an appraiser of the owner's choice, provided that the appraiser is certified; prepares the appraisal consistent with our operational manual; and, the report is reviewed by our review appraiser. Many times the owner's appraiser does not want to be subject to our scrutiny.

  3. See answer #2. We would not contract with the owner's appraiser for the condemnation appraisal or update.

  4. N/A. However, in Iowa, we have a very limited number of certified appraisers who desire to perform eminent domain appraisal work. Our pre-qualification list contains approximately 45 appraisers from 30 appraisal firms.

  5. N/A

  6. N/A

  7. N/A

  8. I would guess that the impact would be no worse than it is now. Our staff must always overcome the property owners' pre-conceived ideas regarding prejudice, advocacy, etc.

KENTUCKY

  1. Sure, but not sure if we have any better than Missouri which seems to operate very similar to Kentucky in this regard. Our fee review appraisers are working out extremely well. I suppose one of our failures would be not continuously policing the pre-qualified list closely enough to remove appraisers who should not be on it.

  2. For property disposal, transportation enhancements and relinquishment of access the property owner selects and hires an appraiser from the Transportation Cabinet's pre-qualified list. For normal right-of- way acquisitions, the Cabinet selects and hires the appraisers with no input from owners. If the owner disagrees with our appraiser's findings (value) the owner can hire an appraiser to prepare another appraisal and submit it to the Cabinet for review. This appraisal is reviewed just as if it had been ordered by the Cabinet. This "owner submitted" appraisal takes place in about 2-3% of the parcels.

  3. No. If the owner selects and hires the appraiser, the appraiser is working for the owner and is paid by the owner.

  4. Never heard of this happening.

  5. For right-of-way projects (see # 2 above) the Cabinet has its own appraisal. If the owner hires an appraiser, it is for rebuttal purposes.

  6. Always. If the review appraiser does not agree with the owner's appraisal, he rejects it. On the other hand, if the reviewer feels it is a better report than the one obtained by the Cabinet, he can accept it as the basis for compensation.

  7. Not enough owner obtained reports submitted to adequately test.

  8. None.

LOUISIANA

  1. The LA DOTD does, in fact, have a panel of approved appraisers. It is required by statute that an appraiser or any consultant apply for and be approved for inclusion on our panel prior to receiving contracts for services from our office, other state offices we may assist or local public agencies we may be working with. Only generally certified appraisers may apply for inclusion and receipt of contracts for all types of assignments. Residentially certified appraisers may apply for residential and unimproved assignments. Any success would be that most are well qualified and understand their assignments as we do have training for our panel of appraisers. Our review appraiser have a very good rapport with the vast majority of appraisers. Failures are normally based upon the individual consultant's cooperation and their understanding of the particular needs of the LA DOTD. Appraisers are selected, two per ownership, by a selection committee with recommendations by the Review Appraiser assigned to a particular project. This has proven to be quite efficient due to the knowledge possessed by the Review Appraiser concerning the qualifications and cooperation shown by the individual appraisers.

  2. The property owner is not involved in the consultant selection process. They are given the opportunity to accompany the appraisers during their inspections and have full access to them during the assignment. They also have access to the Review Appraiser during the duration of the assignment. Upon request, they will be provided maps, plans and appraisal reports. Should they desire, they may hire their own appraiser(s) and provide the report to the LA DOTD for consideration during the negotiation process.

  3. Owners are not involved in the selection of appraisers contracted by the LA DOTD

  4. Owners may hire their own appraisers for submittal of reports for consideration during negotiation. This is a normal process but most owners seem to be satisfied with the quality of work provided by our consultants.

  5. We only use our own appraisers initially, consultant or staff.

  6. If the reviewer does not agree with the appraiser's conclusion, they have the authority to make the final recommendation based upon the data provided by the two appraisers assigned to the project in tandem with their own findings. Generally, we will defer to the higher of the two value conclusions. In most cases, the reviewer and appraisers will work out any problems prior to the recommendation being made. We have few problems in this area.

  7. N/A

  8. Our legal division prefers to utilize consultant appraisers when preparing for trial to avoid the obvious appearance of bias, even though that would be an incorrect assumption. However, we do use our staff appraisers during primary assignments and find that most ownerships are cleared amicably.

MAINE

  1. We have a list of approved appraisers that is the result of a biennial Request For Qualifications and General Consultant Agreement process. Other appraisers may apply to be added to the approved list at any time But GCA's are only negotiated every two years after the formal RFQ.

  2. Property owners are not consulted regarding appraisal assignments.

  3. N/A

  4. N/A

  5. N/A

  6. N/A

  7. N/A

  8. N/A

MARYLAND

  1. Maryland does not allow the owner to participate in the appraiser selection process.

  2. N/A

  3. N/A

  4. N/A

  5. N/A

  6. N/A

  7. N/A

  8. N/A

MICHIGAN

  1. MDOT utilizes a list of approved appraisers to complete work for ROW acquisition purposes. MDOT interviews each appraiser requesting to be on our list, and what level (we have 3) the appraiser is qualified for. This is based on the interview questions, samples of previous work, condemnation experience, witness experience, & etc.

  2. The property is not typically involved in the appraisal assignment process.

  3. If, at the Preliminary Interview stage (or some other correspondence prior to contracting for appraisal work), the property owner indicates a certain appraiser they would like us to use, MDOT will consider their request. It would have to be an appraiser that is already on the approved appraiser list, and the respective appraiser would be contacted by MDOT to insure they wanted to complete the assignment. The Department would contract directly with the appraiser, and the reviewed appraisal would typically be used for acquisition negotiation purposes. If an agreement is not reached, the original appraiser would not typically be used for the updated condemnation valuation process.

  4. In Michigan, appraisers electing to predominantly do work for condemnation purposes usually solicit business from the condemnation attorneys, not the property owners. Honestly, these appraisers typically produce reports that may not be considered exactly relevant to the subject property's market value, and their are only a handful of these type appraisers that practice these procedures.

  5. If MDOT approves the property owner's choice of an appraiser, that appraisal would be treated as the primary valuation report for compensation purposes. Like any other report, it would need to be reviewed and approved, prior to making the Good Faith Offer.

  6. The first step is for the reviewer to contact and discuss his/her concerns about value, with the respective appraiser. Typically, these issues are resolved between the two of them. One other avenue is for the reviewer to change compensation, if the appraiser refuses to do so, but we try to avoid this. If the issues cannot be resolved between the appraiser & reviewer, and the reviewer is not comfortable changing compensation without the appraiser's approval, a second report is usually ordered from another contractor. This is not a very common occurrence or practice.

  7. In the few cases where this is the circumstance, I would say it has appeared to reduce the chances of going to condemnation.

  8. Given the high exposure to condemnation in Michigan, plus the limited amount of available personnel, MDOT staff appraisers typically are only used for non-complex total takings, market studies, summary reports, and appraisal review.

MISSISSIPPI

  1. We select appraisers based on their education, experience, past performance, location, and the ability to deliver the product in a timely manner.

  2. In the appraisal process, we follow the Uniform Act and provide all property owners with an opportunity to accompany the appraiser during the property owner contact and inspection of the subject property. After the appraisal review and approval process the acquisition agents handle all further property owner contacts.

  3. We do not let the property owner choose the appraiser when the purpose of the appraisal is to acquire the property for acquisition purposes. We rely on the MDOT appraisal and appraisal review reports. The property owner can provide an appraisal for consideration, during the acquisition/negotiations process, but we ultimately use the opinion of fair market value established in the MDOT appraisal/appraisal review reports as the basis for the amount believed to be just compensation. However, when MDOT wants to sell excess property that was acquired on a past project as an uneconomic remnant, we do allow the interested purchaser to submit an appraisal to MDOT for appraisal review and acceptance.

  4. N/A as explained above

  5. N/A as explained above

  6. N/A as explained above

  7. N/A as explained above

  8. N/A as explained above

NEBRASKA

Our process is essentially exactly like yours. So the answer to No. 1 is no and the answer to 2 thru 8 is not applicable.

NEW HAMPSHIRE

  1. NH uses a similar process to that which you describe, but final selection is by low bid based on the assignment. This is required by our Governor & Council. If you can avoid the bidding your better off.

  2. In NH the state will pay up to $1000.00 for a property owner to hire their own appraiser. The appraiser does not need to come from our list but must be licensed to do appraisal work in NH. We ask that the owners' appraiser contact the state for plans and explanation of the appraisal issues.

  3. No, if the owner chooses to hire their own appraiser, this appraisal serves as a second appraisal, if condemnation is necessary the state would use their own appraisal.

  4. Appraisers seem to be very busy in NH so we haven't seen this problem, what we do see on occasion are poorly done appraisals by appraisers who haven't done highway work.

  5. The state completes an appraisal also as stated above.

  6. Our reviewer will review the property owners' appraisal and draft a memo to list their concerns. This is used during negotiations to explain the differences between the two appraisals.

  7. I don't think our condemnation rate has changed much, I estimate 10% of owners get their own appraisal. I think the biggest advantage is added credibility, the owners appraisal shows additional effort toward trying to find fair market value.

  8. No

NEW YORK

  1. NYSDOT Real Estate Division uses a qualifying exam for appraisers that wish to be on our Approved List. The exam does not test for general appraisal knowledge as we require an appraiser to be Certified to do any of our work. It does test for the appraiser's knowledge of specific Eminent Domain Procedure Laws as well as the Before and After concept of Appraising as well as Just Compensation, Sign appraising and other special and complicated / advanced types of appraisal work. The list is prepared from those who pass the exam with 75% or higher and the appraisers are canvassed to see where they are willing to work for us (what counties, etc). The list is then compiled on a spread sheet and used not only by NYSDOT but other state agencies to assure the hiring of a qualified professional.

  2. The appraiser is required to contact the property owner and offer them the opportunity to accompany them on their inspection of the property, no matter the significance of the take. The Acquisitions Unit often provides contact diaries and Reports of Physical Inspection to the Appraisers ( Staff or consultant) which assists them in contacting the owner as well as alerting them to special needs of the owner or potentially dangerous situations ( biting dogs for example).

  3. At this time the NYSDOT does not allow the property owner to hire their own appraiser. We do however offer them the opportunity to provide us with support and or documentation that would indicate more money than the offer. If at that time they have an appraisal completed we will consider it if the appraiser is qualified and follows proper appraisal standards and practices.

  4. N/A. However in some areas appraisers and attorneys who typically do "Claimant work" have been known to attend public hearings or informational meetings to solicit work.

  5. N/A

  6. If the reviewer does not like the appraisal (no matter who wrote it) He/she can change or amend the amount to correct the situation. If there is a request from acquisitions to increase the claim amount and it is supported, the reviewer can agree to it or not. If not the Agent can go through an Administrative settlement procedure and try to get more money to settle a claim or potential claim.

  7. N/A

  8. Staff appraisers are generally our most reliable resource and give us our best work. They are reliable, knowledgeable and they are HERE. We don't have the people to rely on staff any more.

NORTH CAROLINA

  1. We do not have a list but allow our Area Appraiser to determine whether to utilize a staff or fee appraiser. If a fee appraiser is used, the Area Appraiser chooses a fee appraiser who has the experience to do the report. This process works well for us.

  2. None.

  3. N/A.

  4. N/A

  5. N/A.

  6. The Review Appraiser makes the final determination as to fair market value and is subject to testify. The reviewer prepares a Letter of Adjustment which is attached to the appraisal.

  7. N/A

  8. The NCDOT has a staff of 50 State Certified Appraisers who perform over 50% of our appraisals. I am sure most property owners would choose a fee appraiser. There are not enough condemnation appraisers to handle our volume of work and make our schedules.

NORTH DAKOTA

  1. NDDOT maintains a list of approved appraisers. ND is a rural state with relatively few appraisers, so the list is short. In addition, of the individuals appearing on the list, even fewer seem to be interested in appraisals for eminent domain. Most fee appraisers are devoting their practice to appraisals for mortgage-loan purposes. We generally keep uncomplicated appraisal work in-house, hiring fee appraisers for the more complex assignments. For internal purposes, the list works fairly well because we understand its limitation, that is, that the selection of a fee appraiser still requires a review of the individual's experience and general competence prior to matching the person with a particular assignment. We've added cautionary language concerning reliance on the list because of requests for the list from outside our Agency. The meaning of appraiser competence is not well understood by the general population, and there tends to be misinformation or mistaken beliefs that equate certification with competence in all types of appraisal problems.

  2. If the appraisal problem is particularly complex, we will procure two appraisals of the property right away so that both can be reviewed prior to approval of an offer. Appraisals procured by the Agency are at the Agency's expense. The owner is given a copy of the appraisal, as required by statute. The appraiser is always required to contact the property owner and extend an offer of accompaniment during the inspection. We prefer that the appraiser include as much detail as possible in the appraisal report concerning this contact, up to and including any comments the owner may have made about the property, its value, comparable sales, damages, comments about mitigation, etc. The appraiser's should address ALL issues the owner raises, regardless of whether they really are relevant to the appraisal problem. We do not expect -- nor do we want -- the appraiser to estimate compensation for non-compensable items. However, a failure of the appraiser to comment on the owner's concerns is a disservice because the owner could jump to the conclusion that the appraiser ignored him/her. This would serve no good purpose for anyone concerned.

  3. We select the appraiser from our list of approved appraisers. If the owner disagrees with the offer, they are free to obtain another appraisal at their own expense. We would encourage but would not require that the owner selects an appraiser from the NDDOT's list of appraisers. However, we would require that the appraiser selected by the owner be certified in North Dakota by the North Dakota Appraiser Qualifications & Ethics Board, or have equivalent certification in another state and first obtain a temporary practice permit from the Board in ND. We would also expect that the appraiser would develop and report the appraisal to the same standards observed by the State's appraiser, exercising professional due diligence and objectivity, observing only credible appraisal methods, and addressing only those issues that are compensable by law. The appraisal would be subject to and be given the same consideration in the review process as afforded to the appraisal obtained by the State. The State would re-establish just compensation if review of the new appraisal indicated this to be warranted.

  4. We have no knowledge of solicitation efforts.

  5. To ensure objectivity to both the property owner AND the general public, the State (or its contract appraiser) prepares the appraisal. The owner can obtain a second appraisal at personal expense as per Item #3.

  6. If preliminary review of the work suggests that a deficiency exists in the appraisal, the appraiser is requested in writing to consider the matter. Often, the real issue is simply a need to clarify certain points of the analysis or clear up ambiguous statements or other miscommunication. More serious situations have been encountered, however, in which the appraiser simply assumed too much or too little, and did not ask enough questions to gain a more accurate understanding of the appraisal problem. The ultimate goal of all appraisal reviews is to obtain a reasonable, market-justified basis for the Agency's estimate of just compensation. We would not automatically reject a report without first providing the individual responsible for the work opportunity to comment on or otherwise evaluate reviewer concerns. Significant issues are documented in writing and attached to the review which, in turn, is attached to the appraisal report. If an issue cannot be resolved, we would consider obtaining another appraisal. Failing this, the reviewer can develop his/her own appraisal which, to reduce duplication of effort, could reference any information and analysis of the original appraisal that the reviewer believes is credible.

  7. No. It's possible that the owner's involvement in the selection process might enhance the overall perception of appraiser independence but, if the appraiser is really doing his or her job, the outcome should have nothing to do with the owner's participation. Our strategy of procuring two independent appraisals (complex properties) may help to reduce the likelihood of an owner insisting on upon obtaining his/her own appraisal, but this is my own speculation. I suspect that it probably doesn't really matter HOW MANY appraisals the agency obtains: if the owner doesn't like the offer, the owner won't sign.

  8. Yes. One of my bigger concerns is that, as the more advanced or complex appraisal assignments are being assigned to consultants, fewer "hands-on" training opportunities are being made available to our staff appraisers. Appraisal courses by themselves do not make an appraiser; experience from real-life situations is necessary to build on a working knowledge of valuation theory, and to refine investigative and analytical skills. Several staff appraisers have expressed interest in becoming certified, but feel like they must compete with each other for the uncomplicated assignments that are kept in-house, and some have expressed frustration at the lack of more complex assignments. The requirements for certification will be increasing in 2008, and some have expressed doubts that they will be able to obtain enough experience credits to gain certification before the change. The recent increase in the threshold for Appraisal Waivers (Uniform Act) has also added to their concerns because the perception is that there will be even fewer appraisal assignments in the future. There have been concerns expressed, nationally, over the lack of initiative from within the private sector to train new appraisers, and that the responsibility of doing so is falling onto government agencies. I have to agree, but there are some serious limitations on our ability to train when training opportunities are being outsourced. I suspect that other Agencies are encountering similar problems. We all need to be concerned about the implications of this over the long haul.

OHIO

  1. Successes: Timeliness:-Timeliness has improved with the imposition of penalty clauses for late delivery. The penalty clauses are waived if the Agency caused the delay but traditionally a revised due date is established in the event of a delay and then the penalty clauses is reinstated with the revised due date.

    Report Quality: Improvement has been made with the adoption of a USPAP Compliant Summary R/W Appraisal Report Template. This template built upon the report format in the UASFLA with accommodation for nuances in Ohio eminent domain statutes and Ohio case law. In addition, recent changes in Ohio law make it mandatory to share the approved appraisal during negotiations which put additional pressure on both the acquiring agency and the appraisers to improve quality.

    Training: ODOT offers ongoing training to appraisers regarding its policies and procedures, Ohio eminent domain laws, R/W and Construction plan reading and proper completion of Departmental appraisal forms. All of this training is pre-approved for continuing education credit in Real Estate and Appraisal through the Ohio Division of Real Estate and Professional Licensing. By having another agency approve the DOT training courses for CE, the entire appraisal community has taken notice and started to attend courses. ODOT does not intend to teach appraisers how to appraise (not compete with established appraisal organizations) but instead focuses exclusively on compliance with Ohio eminent domain laws and ODOT Appraisal Policies and Procedures with the idea that all appraisers (both for and against the acquiring agency) will eventually adopt these appraisal procedures (because they are the published standard in Ohio) and facilitate settlements.

    Credibility: ODOT Appraisal Managers often accept invitations to be a guest speaker and carry the gospel of ODOT P & P to appraisal organizations throughout the State. This gives the appraisers in the community an opportunity to challenge the agency's leading appraisers on USPAP, eminent domain law and appraisal practice. While this can sometimes get into heated debate, the debate remains professional and the agency is able to use these forums to educate appraisers that work for the agency, as well as against it, regarding proper appraisal practice in the eminent domain arena.

    Project Management: Project consistency has been the mantra of the FHWA and the acquisition agent for many years. For ODOT, the best way to accomplish this consistency is through proper selection and assignment of appraisers rather than by decree, collusion or heavy handed review appraisers. The simplest way to achieve consistency is to hire one appraiser for a project. (The presumption is that a competent appraiser will know what he/she did on the adjoining parcels and that knowledge will defray any wild fluctuations in value and force a self imposed consistency). Oftentimes a project is either too large, too diverse or too little lead time is allocated for the acquisition process and it is not possible to have only one appraiser on the project. In those instances, the wise project manager makes appraisal assignments based upon property type (all residential properties to one appraiser, all retail properties to another appraiser and all agricultural properties to a third appraiser). Assignments made by report type (simple assignments to one appraiser and complex assignments to another appraiser) usually result in disastrous fluctuations in value conclusions by appraisers resulting in many parcels being re-appraised. If multiple appraisers are being used on the same types of properties (commercial) then it is wise to split the assignments in mid-block rather than at intersections of major roads. It is easier to settle differences in value opinions mid-block than it is to settle differences when you have different appraisers on opposing corners of the same intersection.

  2. None. ODOT doesn't focus on the person (or personality) but instead focuses on the appraisal problem to be solved. ODOT is currently instituting a process whereby the acquiring agency will hire the Review Appraiser prior to selection of the appraiser. (This process presumes that the Review Appraiser is "THE" most seasoned veteran of eminent domain appraisal and the impact of partial takings on residue properties and therefore the most competent person to make any initial judgment regarding the appraisal problem to be solved.) The review appraiser is tasked to assist the Acquiring Agency in determining the appraisal problem to be solved, assist in the selection of the most appropriate appraisal format to solve this problem and then participate in a discussion of the type of appraisal talent that is necessary or available in the marketplace. The review appraiser is "not" allowed to select the appraiser but instead is asked to discuss the traits that an appraiser should have in order to make the project successful. By taking this approach the Acquiring Agency is reasonably assured that it has taken the steps necessary to protect the property owners interests as well as meeting the fiduciary responsibility of a public agency to solve the problem correctly on the first attempt and avoid costly expenditures associated with re-appraisals.

  3. On occasion, during the litigation process this type of procedure has been attempted. It has met with mixed results due to the property owners attorney interfering with the Agency's attempt to scope the appraiser in proper appraisal procedures and practices. It is seldom satisfactory because the Agency has an obligation to comply with acquisition laws and procedures while the property owner's attorney is predominantly concerned with obtaining a large settlement. These two items can be mutually exclusive.

  4. ODOT does not permit this practice in Ohio on projects that involve Federal funding or State Highway funding. Ambulance chasers exist in any profession. It is reasonable (maybe even obligatory) to expect that the appraisal profession is no different. The single biggest problem occurs when the appraiser gets caught up in the belief that they have been hired to "Right a Wrong" or "Speak for the Little Guy" which results in advocacy instead of an independent valuation process. That alone may be enough of a reason not to adopt this type of policy.

    ODOT's best defense against this type of practice has been our aggressive training program which is targeted toward all appraisers statewide. ODOT believes that the valuation process should not be influenced by who pays the appraisal fee but instead should be influenced by Ohio law, USPAP and published appraisal standards for appraisals under eminent domain. (Having said that , ODOT does recognize thatmany attorney's and appraisers don't believe they have any obligation to follow ODOT procedures. This is an ongoing battle.) ODOT has taken its eminent domain appraisal courses to all corners of the State of Ohio and continues to do so. Because of this we sometimes get appraisers that attend our courses that either don't often get involved in eminent domain work or tend to work exclusively for the property owners attorney. In both cases this works toward ODOT's benefit. First, because we continually challenge the appraisers that work exclusively against the acquiring agency to work within the laws and published appraisal standards. Secondly, it helps us to identify potential recruits to ODOT's pre-approved appraiser list.

  5. N/A. In the event that something like this is tried in Ohio, the deciding factor will be whether a proper appraisal scoping process occurs that would give the acquiring agency the confidence that the appraisal report that it receives has a great likelihood that it will meet the agency's minimum standards and also be compliant with the program needs.

  6. It depends on the level of disagreement. In Ohio the approved appraisal report is shared with the property owner. If the reviewer becomes the appraiser of record then the reviewer's analysis and conclusions are shared with the property owner. It all boils down to credibility. How credible was the original report and also how credible were the reviewers' conclusions? Because the foundation for the agency's offer is shared with the property owner, there is an obligation to maintain a high level of professionalism and competence in both the appraisal process and in the review process.

  7. N/A in Ohio. The question invites speculation. What is being unsaid but still assumed when the property owner that typically knows little if anything about appraisals and appraisers is offered an opportunity to select their own appraiser?

  8. N/A in Ohio. If the property owner was allowed to select their own appraiser, why would they want to use the acquiring agency's staff? Doesn't the whole proposition of having the property owner select their own appraiser imply that there is no trust or confidence in the Agency's selected appraiser? Given that supposition, it would be reasonable to assume that the agency staff would never get selected by the property owner.

VIRGINIA

  1. VDOT has an Approved Appraiser Panel which appears to be similar to that of the State of Missouri. Any appraiser (licensed residential, certified residential and certified general) may apply to be placed on VDOT's approved appraiser panel. Applications are reviewed by three staffers who are members of an Appraiser Relations Committee. The committee makes a recommendation to the Chief Appraiser for acceptance or rejection.

  2. A property owner, or his designee, is provided an opportunity to accompany the appraiser on the inspection of the property. Also the property owner may submit an appraisal that he has obtained at his expense for consideration by VDOT in the negotiation process. The property owner is also provided with a copy of VDOT's appraisal prior to entering into negotiations and may express any concerns that he may have about the appraisal during the negotiations.

  3. VDOT- does not involved the property owner in the selection of the appraiser.

  4. N/A - VDOT does not allow a property owner to participate in the selection of the appraiser.

  5. N/A

  6. If VDOT's review appraiser does not agree with the appraiser's conclusion, he may choose to do a Determination of Fact to reflect his own view or return the appraisal for corrections or even reject the appraisal in its entirety and recommend a second appraisal be prepared.

  7. N/A

  8. N/A

WASHINGTON

  1. We have an approved appraiser list and simply require that locals use appraisers from that list. We don't really have any alternate method that we can recommend.

  2. None at this point.

  3. We select the appraiser, but I am interested in the idea of getting input from the property owner.

  4. N/A

  5. N/A

  6. Generally the reviewer and the appraiser are able to work out any issues or differences. We have occasionally (in fact rarely) had another appraisal done by a different appraiser.

  7. N/A

  8. N/A

WEST VIRGINIA

  1. WVDOT maintains a list of pre-approved appraisers for DOT and LPA work. We currently have around 30 individuals on the list and this system of procuring appraisals seems to work well from both a timing and quality standpoint.

  2. The property owner is afforded the opportunity to accompany the appraiser during the inspection and provide any information they may consider relevant. This can include submission of a recent appraisal performed on the property but does not involve any owner input as to the election of the appraiser.

  3. The WVDOT chooses the appraiser to complete the appraisal. If a property owner wishes to have a report completed on their behalf, they are encouraged to utilize an appraiser from the WVDOT approved list or one experienced in eminent domain.

  4. N/A. However, there are approximately 6 appraisers who consistently complete appraisals on behalf of property owners in regard to eminent domain issues. Many times, their values are, by orders of magnitude, predictably higher than the state's approved appraisal(s).

  5. N/A, see #3 above

  6. The agency reviewer has full authority to approve, alter, or disapprove any submitted appraisal. Any changes made result in the reviewer becoming the appraiser and generally allows for additional latitude at subsequent hearings, mediations, etc.

  7. N/A

  8. N/A

WISCONSIN

We have restructured at WisDOT and Real Estate is now a unit within a much larger Bureau called Technical Services. The Technical Services Director is Dan McGuire. I am no longer Acting Real Estate Director----I've gone back to my original position as Acquisition Manager. I know that this email network is set up with Directors only and thus it would make sense to replace my name with Dan McGuire. However, given Dan's much broader area of responsibility (real estate is just a very small percentage of his oversight responsibility), I fear that many of your survey requests will go unanswered because of his frequent unavailability (at meetings, etc.)

Do any of the States have more than one person listed on the distribution list? If so, I will talk with Dan to see who he feels might be the appropriate contact(s).

Dan: For your information, there are a fairly large number of survey requests that are sent in any given year to all states for their responses. Often the timeframes are quite short. This appraisal request, for example, came in while I was in Michigan for the Domestic Scan last week and Wisconsin missed the deadline.

Updated: 04/02/2013
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