Real Property Appraisals/correct appraisal method
I have a property that the county wants to purchase for use as a trail. The property is part of a railroad bed that runs approximately 600 feet and at its highest point is over 20 feet above the swamp and small stream which it passes over. The entire piece was created to allow the railroad to pass over the swamp/stream to connect to a trestle about 200 feet beyond our property boundary. I have contended over the 20 years that the county has desired this property that the railroad bed should be considered an improvement as it is beyond a doubt man made with a culvert to allow water passage under it with a specific purpose being to allow passage over the swamp. We have used the railroad bed to drive vehicles on to access the culvert to keep it clear of debris as well as a recreational private trail. The county finally has agreed that it is an improvement, the question is how to appraise it. I suggested the cost approach as it is unique and comparables are not available. I have provided a replacement cost value to build it today from a reputable contractor that does this type of work, but I do not know how to calculate the soft costs (engineering, environmental studies and so forth). In addition I do not know how to show depreciation. Am I on the right track? Any suggestions on how to better value the improvement or find values for the soft costs?
You have an interesting and complex valuation issue. This issue is similar to the valuation of a "taking" such as a road way widening. You mentioned that you are in Washington, therefore the State of Washington laws regarding a "taking" are going to apply. I am familiar with the State of CA laws, but not Washington laws.
You are going to have to assemble a slate of experts to help you protect your property rights. Chief among these will be an Attorney familiar with road ways and the valuation of these types of properties. You are also going to have to hire a very experienced appraiser, someone with a "MAI" designation. I think you should look for an appraiser familiar with "condemnation" appraising.
You are not going to be able to estimate the soft costs for this roadway unless you are an engineer or environmental engineer. You will have to hire this kind of expert to assist you in estimating these costs. I'm surprised the contractor you hired could not refer you to an engineer.
While the Cost Approach may be "one" of the approaches to the valuation of this property, the county is most likely going to require sales data of some type of land parcels. While comparables that are an exact match as to the use of this property may not be available, comparables will have to be found for some type of comparison. This is where the experienced appraiser comes in; they will know how to locate these "other" comparable types and analyze them.
You can be sure that the County will have an appraisal completed by their appraiser valuation expert. If you don't agree with their offer, CA law says that you have the right to hire your own expert. If the experts disagree, CA law proscribes that there is either an arbitration, or a Trial. I have no idea what the legal requirements in the State of Washington are. This is why you need an experienced attorney in your court.
Good luck in working out a reasonable price for your property