In real estate appraising it’s essential to inspect the entire perimeter of a property. There could be any number of hidden aspects or features not immediately obvious at any property site. North by Northwest appraiser trainee, Erin Hogge and CEO, Anthony Alderman experienced quite a big surprise when they were working on an ROW project for the city of Hickory. We touched on this unusual appraisal assignment before in our November 2020 Newsletter, but here is the story in full.
Erin and Anthony had gone to what they expected to be a routine inspection. It was a typical industrial building that’s parking lot was going to be impacted by the ROW project. “We thought it was like any other building,” Erin revealed.
From Routine Inspection to Extraordinary Appraisal Problem
When they first arrived they began taking pictures of the property, starting with the interior, as per usual of any number of similar ROW projects. They talked to the owner throughout the interior inspection and then went outside. Erin describes how Anthony started walking around to the back of the building and she followed. What they found took everyone by surprise.
There was a giant sinkhole behind the building that was eating away at the foundations of the building they had just been standing inside of. “Since we had already done the interior inspection, I realized there was a real element of danger involved. [The Sinkhole] could have collapsed more at any moment. We were technically standing above it in the building. I didn’t get near it,” Erin said.
The owner explained that he had known there was a small sinkhole but didn’t know it had grown so significantly. The small sinkhole had been created by some collapsed pipes from the drainage lines under the city. The collapsed pipes eventually generated a sinkhole which caused the nearby railroad track to become engulfed in the building.
Finding a Solution for the Sinkhole
North by Northwest had to determine what it would cost for the owner to fix the sinkhole. The team sought out the advice of Stuart Engineering to uncover the cost to fix the sinkhole. Once Stewart Engineering provided the quote, NxNW deducted that cost from the value. The good news was there was no danger of the same sinkhole occurring in the same area again, because of the road project that the City of Hickory was doing involved closing the drainage lines. Had they not cut off those lines then that could have happened again.
Solving the Problem and Similar Projects
The moral of the story from an appraiser’s perspective is to avoid making assumptions about a property prior to inspection. What Erin and Anthony thought would be a normal, “no big deal” appraisal turned out to be quite complex.
For more examples of not-so-typical right of way projects that the North by Northwest team has handled check out our story on the ROW Project we did at the Outer banks. If you have a tricky ROW appraisal problem you need help with, we’re sure we can help!