Under the United States and North Carolina Constitutions, when the government takes land, the property owner is entitled to just compensation for what is taken. Just compensation is typically determined using one of three approaches:
- Market or comparable sales approach
A market approach typically looks to comparable properties that have been sold and considers factors such as physical characteristics, including the size and shape of the parcel, land topography and geography, zoning, conditions of sale, financing terms, location, public or private utilities, and legal encumbrances.
- Cost approach
A cost approach generally analyzes the cost of reproducing or replacing any improvements to the property, less any losses in value from depreciation, plus the land value.
- Income capitalization approach
Finally, an income capitalization approach considers a property’s earning ability based on the capitalization of income to set the value.
In all of these approaches, the land must be considered for its highest and best use.
Definition of Highest and Best Use
Highest and best use is defined by the American Institute of Real Estate Appraisers, The Appraisal of Real Estate (9th ed. 1987), as “the reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.”
Getting the Maximum Value For Your Land
At Henson Fuerst, protecting your best interests and getting you the best possible value for your property is our priority. Evaluating and selecting experts such as appraisers, real estate brokers, engineers, surveyors, hydrologists, land planning experts, financial experts, and others is critical to helping you recover just compensation for your land.
Our team has over 45 years of experience handling complex client matters for clients throughout our state. Contact the North Carolina eminent domain lawyers at our law firm today by calling (919) 781-1107 toll-free or completing a free initial consultation form on our website today.