Five Methods of Determining Proximity Damages

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Five Methods of Determining Proximity Damages

• Presented in Descending Order

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1. Matched Paired Sales

• The perfect matched pair of the subject selling
  immediately before and after a widening project.
• Matching similar residences along the same
  highway with different set-backs.

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2. Collect After Comps

• After comps are sales that are forming the
  indicated bottom of the market of properties that
  are similar to the subject.
• Depending of the degree of proximity, one can
  slide along the range of difference in value from
  the subject as appraised before and the bottom of
  the indicated market.
• Advantage the method will reflect current market
  and location conditions.

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3. Compare to Any Other Structure

• Similar to method 2 but with a lesser degree of
  comparability.
• One may need to compare bricks to frame and new
  to older homes.
• Needs a greater degree of analysis and adjustment
  to justify.

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4. Document the Market Perception

• Almost an if all else fails option.
• Get the opinion of realtors, developers and other
  appraisers as to how the proximity will affect
  your subject property.
• Disadvantage dealing with perceptions rather
  than market evidence.

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5. Cost to Move the Residence.

• Works well with mobile homes.
• Useful in extreme proximity situations where one
  is on the verge of acquiring the residence.
• Disadvantage often not a physically feasible
  solution.

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Conclusion

• Proximity damages are relevant to residential
  properties.
• Non-residential properties are usually damages by
  cost-to-cure, capitalized rent loss or change to
  a different highest and best use.