Real Estate Valuation In Colorado
All real estate transactions and tax issues involve some element of valuation. Colorado, in that sense, is no different from any other state. The recent debacle of packing subprime mortgages into securites illustrates one of the many issues with valuation. Primarily that valuation is both an art and a science and is fundamentally subjective. Beauty is in the eye of the beholder. For example, say a pipeline company wants to lay a pipeline across your property. The land was owned by your dad and his dad before him. You have put blood, sweat and tears into the land and know every pitch of dirt. Now this big bad corporate faceless behemoth wants to buy your land. Obviously you think it is worth much more than the pipeline company. The only fly in the ointment is that the pipeline company has the right to exercise eminent domain. In other words, they can and will take it whether you like it or not. The only real issue here is how much the company will have to pay you. And that is a question of valuation. The Colorado statute does not provide for landowner’s attorneys fees in eminent domain cases unless the final award equals or exceeds 130% of the condemnor’s final written offer. You should always factor that into your decision making. Do not let your emotional attachments cloud your financial judgment. Instead focus on obtaining quality appraisals. If your issue is big enough, get more than one appraisal. All apples are not red. One appraiser may and probably will have a different opinion than another. Another important area of valuation is in the determination and challenging of property tax valuations. The counties generally have large computer databases and model their valuations from those databases. An independent appraisal may reveal that your property should be valued much lower than the appraiser’s estimate. Most attorneys do not have AIREA training like I do. I can guarantee you that it makes a huge difference. It allows me to critically analyze an appraisal report and identify its strengths and weaknesses.