The world of real estate can be a labyrinth of terms and procedures that the average person may find overwhelming.  One term you may have heard but not fully understand is “condemnation” in the context of real estate appraisals.

What is Condemnation?

Condemnation is the legal process by which a government entity takes private property for public use under the principle of eminent domain.  Eminent domain is the inherent power of the government to acquire private property for a public purpose, provided that just compensation is given to the property owner.  In such cases, an appraisal plays a pivotal role in determining the fair market value of the property being taken.

Why Would a Property be Condemned?

Properties can be condemned for a variety of reasons, most commonly for public works projects like highways, schools, or utilities.  For instance, in the aftermath of Hurricane Katrina, the government in Louisiana had to condemn certain properties for flood control and rebuilding projects.  Additionally, Louisiana’s extensive network of oil and gas pipelines has led to the use of eminent domain to secure the necessary land from private owners.  The goal of condemnation is generally for the public good, but that doesn’t make the process any less challenging for property owners affected by it.

The Role of the Appraiser in Condemnation

An appraiser is tasked with determining the fair market value of the property.  This is crucial for ensuring that the property owner receives a just valuation.  In addition to assessing the worth of the property itself, appraisers may also factor in any decline in value affecting the remaining part of a larger property when only a section is acquired.  This calculation is incorporated into the overall valuation.

How is Fair Market Value Determined?

The fair market value is generally determined based on comparable sales of similar properties, income the property generates, and the cost of replacing the property minus depreciation.  These are commonly referred to as the Sales Comparison Approach, Income Approach, and Cost Approach respectively.  Appraisers gather extensive market data.  They also consider current economic indicators, interest rates, and market trends that would have an impact on property value.


Understanding the intricacies of condemnation and appraisals can equip you with the knowledge needed to navigate these challenging situations.  An informed property owner is a more empowered one, particularly in matters as significant as these.

While this article aims to provide a general overview, it should not be considered as a substitute for legal or professional advice. If you are facing a situation involving condemnation, consult experts in the field for guidance tailored to your unique circumstances.