Easement Valuations

US Real Estate Advisors, Inc. (USREA) specializes and has provided hundreds of comprehensive real estate Easement Valuation appraisal reports. These valuation estimates have involved and determined the "before and after value" for both residential and commercial properties. The difference between the before and after values is the Diminution In Value (DIV) estimate.

According to the Dictionary of Real Estate Appraisal, an easement is the "conveyance of certain property rights, but not ownership, to a parcel of real estate." An easement can be temporary or it can be permanent depending on the type of easement.

They are three types of easements:

  • Subsurface
  • Surface
  • Overhead

Subsurface easements may be required during construction to lay down water and sewer pipes, or communication wires. Overhead easements may be needed for transmission lines or aviation requirements. Surface easements can be the most disruptive and may be created for flood control, highway requirements or access to other parcels of land.

The task of the appraiser is to value the "rights conveyed" by the creation of the easement and to value them correctly. The value of the easement will be based on the difference between the value of the whole property before (or without) the easement and the value of the property after (or with) the easement in place. The difference in value before the easement and after the easement is known as the Diminution in Value (DIV).

When investigating an easement, it is important that the appraiser understand the nature of both the legal and physical rights that are being sought. The appraiser needs to have a detailed understanding of the nature of the easement in order to calculate the correct DIV.

When performing an easement valuation appraisal report it is important to ask oneself some important questions:

  1. Did the appraiser use the right set of comparable sales?
    • Comparable sales on the wrong side of town or sales that are too old or with excess land or where capital expenditures are required may lead to an incorrect calculation of DIV.
  2. Was the value of the property reduced by the correct percentage?
    • The appraiser can't blindly apply a % decline to the entire property. The reduction should only apply to the percentage decline of the easement to the land area being disputed to calculate the DIV and not to the total value of the property.
  3. Did the appraiser remember that the property owner still retained some rights?
    • What the appraiser is trying to do is estimate the impact of the easement on the property and then to value the impacts. The extent of the remaining rights is what determines the impact of the easement and therefore the value of the easement. The value of the easement is based on what the property owner has lost, NOT by what the condemnor has gained.

Experience is often the most important factor in selecting an appraiser to perform an Easement Valuation. US Real Estate Advisors focuses on Easement Appraisals and the expertise and experience to correctly value the DIV for easement valuations.

The benefits to using USREA to complete your easement appraisals are as follows:

  1. Nationwide Coverage
  2. One Source of Contact
  3. Over 30 Years of Combined Staff Experience Working Nationwide
  4. Member of The International Right of Way Association
  5. Member of the Appraisal Institute (MAI) and Counselor of Real Estate (CRE) and State Certified in many States

In addition to the above we also do appraisals on complex assignments for all property types.

Related Projects

Over 50 Easement Valuations Located Nationwide

Analyzed complex "Dimunition In Valuation (DIV)" in property due to title defect.

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