Compensation
The measure that governs every California acquisition, and the three things that decide where two appraisals part company.
Fair market value is the price a willing buyer and a willing seller would agree on, neither under compulsion to buy or sell, both fully informed of the property uses and of the state of the market, with the property exposed for sale for a reasonable period.
Two parts of that definition do a lot of work. Neither party is under compulsion, so the pressure an owner is actually under does not lower the price. And both are fully informed, so an appraisal that misses a lawful use of the property is not measuring fair market value.
Property is valued for the highest and best use to which it could lawfully be put, not necessarily the use it has today. A use qualifies where it is physically possible, legally permissible, financially feasible and maximally productive. Zoning, entitlements and a reasonable probability of rezoning all feed into it.
Value is measured without the influence of the project that prompted the taking. Neither an increase nor a decrease caused by the project belongs in the number.
Most valuation gaps come from a short list: which comparable sales were selected and how they were adjusted, whether the highest and best use was correctly identified, and, on a partial take, whether damages to the remainder were measured at all. Reading both appraisals side by side usually finds the difference in an afternoon.
Start with your situation
Related resources
More resources are on the way. New guides publish every week.
Questions owners ask
No. Assessed value is a property tax figure and often bears little relation to market value. Eminent domain uses fair market value measured by appraisal.
Yes. Code of Civil Procedure section 1263.025 provides for reimbursement of an independent appraisal up to a statutory cap, currently 5,000 dollars.
It should not. Value is measured without the increase or decrease in value caused by the project for which the property is taken.
Then highest and best use matters. A reasonable probability of a zoning change or an entitlement can be considered in valuing the property.
Next step
Compare the offer you received against how California measures value.