Eminent Domain: What Is the Fair Market Value of My Property?

Fair market value is what a willing buyer and a willing seller would accept in the ordinary course of business when neither is being compelled to act. Fair market value is not sentimental value or the price the property would see for under special extraordinary circumstances.

In determining fair market value, it is not appropriate to consider speculative or imaginary damages to the property. Just compensation must only be confined to those elements that affect the property’s market value, which are appreciable and substantial and have some bearing upon the market value on the date of the taking.

Fair market value is a price that a purchaser would give, and a seller would take, where neither the seller nor the buyer is acting under any special circumstances of compulsion. The criteria or test in market value is that the parties are willing to sell and willing to buy and neither is acting under any pressure or any compulsion to sell or to buy. Fair market value is not necessarily the value that the landowner places on the property, and it is not controlled by the landowner’s willingness or unwillingness to sell the property.

Typically, consideration of comparable sales of property is an appropriate approach in determining the fair market value of your taken property. Comparable sales prices are the prices for which similar property has sold on the open market within a reasonable time of the condemnation of the property involved. However, to be considered a comparable sale, the following criteria should be assessed:

1. Was the sale of the other property voluntary?

2. Is the other sale similar property to the property under consideration in this case, either as to size or other physical characteristics?

3. Is the other sale near or in the close proximity to the condemned property?

4. How long ago did the other sale occur?