Chapter 2: Operating Procedures

Anchor: #BGBGIICC

Section 1: Introduction

Number of Appraisals

Within the process of assigning and contracting with fee appraisers to appraise parcels on acquisition projects, the District Reviewer will estimate the compensation of the parcels to be acquired or utilize the preliminary estimate of costs for the project to consider the need for two appraisal reports. Upon reviewing the estimated compensation for parcels, the District Reviewer shall obtain two initial appraisal reports by assigning two TxDOT-approved fee appraisers to every parcel having an estimated compensation of $100,000 or greater, with the exception of the following properties:

Rural and agriculture parcels
Residential parcels
Small takings of uncomplicated parcels
Unimproved properties where no imminent change in “highest and best use” is anticipated in the foreseeable future
Valuations that are made by Specialists
Parcels that have been created from existing parcels which have current appraisal reports. This exclusion also extends to X-parcels for overlooked improvements.

An additional appraisal report may be secured from a different fee appraiser if it is the District appraisal reviewer’s opinion that there is need for another appraisal report.

Likewise, a third or additional appraisal report can be obtained when two appraisals obtained on a parcel reflect honest differences in opinion that prevent the reviewing appraiser from conscientiously recommending a value for approval. The District may want to consult with ROW Division in deciding to obtain a third or additional appraisal; however, approval for a third or additional appraisal MUST be obtained from ROW Acquisition Section Director or designee.

NOTE: An update by the original appraiser on a parcel in Eminent Domain does not fall under the “third appraisal” rule, and will be paid on an hourly basis.

All approved values for parcels must be established by one of the following four methods:

Real Estate Appraisal Report, Form ROW-A-5, used for improved and comprehensive parcels.
Real Estate Appraisal Report, Form ROW-A-6, used primarily to value vacant land when minor improvements are valued on a depreciated cost basis, and with minor cost to cure items, such as re-fencing the remainder, and for simple land acquisitions and site improvements.
NOTE: Fee appraisers may only use Form ROW-A-5 or Form ROW-A-6 as their evaluation forms.
Real Estate Value Finding Report, Form ROW-A-7, used when the compensation centers on land value, and the expected acquisition is $25,000.00 or less, or when there are minor cost to cure items.
Memorandum of Value Determination, Form ROW-A-8, used when a total compensation does not exceed $10,000.00.
NOTE: Only District staff appraisers may use these two forms (Forms A-7 and A-8).

Anchor: #CHDBCBDC

Market Data Files

Each District should develop data files of all recent real property sales in or near the subject project before pre-appraisal contact or appraising begins. Such files need not be elaborate but should indicate the location and date of sale so during appraisal review it may be determined that the appraiser considered adequate sales. In addition, accumulate information regarding building costs, fencing costs, etc. for the area of each project under development.