What is Fair Market Value?
Generally, fair market value is the price a willing buyer would pay a willing seller. This assumes neither party is under any pressure to buy or sell. How is Fair Market Value Determined?
Fair market value is determined through appraisals. The court will compare the property to be taken to comparable properties which were previously sold in the area. Other factors used by the court to make their decision include: - The history of economic development in the area
- The proximity of the taken property to other properties with similar uses
- The existence of specific plans for use of the land
The court will also consider the location, frontage, depth, improvements, and price previously paid for similar parcels. What If I Had Plans to Use My Land?
When the property is being valued, the court cannot speculate on the future value of the land. But the court will consider specific and concrete plans. Generally, your land will be valued according to its highest and best use. A common example of this is if you have vacant farmland. You will be compensated for the price of what good farmland would bring on the market. What Date is Used to Determine Fair Market Value?
There are various federal, state and local statutes determining at what time the value of the taken property should be used. Most statutes determine the value as the earlier of: - The date that the condemning authority deposits payment with the court; or
- The date the trial of the issue determining the value of the property commences.
What If More than One Person Owns the Property?
If there are several owners who own the property that is being taken, each owner will receive the fair market value for their interest in the property. Do I Need a Lawyer to Get Fair Market Value?
If a condemning authority wants to take your land, an experienced real property lawyer can explain how the fair market value is determined in your area. A real property attorney also can represent you throughout eminent domain proceedings and help you receive the compensation you are entitled to under the law. |
