DelDOT Real Estate Services Manual
PART 5 – APPRAISAL FUNCTION
TABLE OF CONTENTS
APPRAISAL ASSIGNMENT AND APPRAISAL REVIEW .......................................................................... 3
5.1.A - PURPOSE ..................................................................................................................................... 3
5.1.B - AUTHORITY .................................................................................................................................. 3
5.1.C - SCOPE .......................................................................................................................................... 3
5.1.D - TRAINING ...................................................................................................................................... 3
5.1.E - DOCUMENTS ................................................................................................................................ 3
5.1.E.1 - Mandatory documents ............................................................................................................. 3
5.1.E.2 - Documents to be used relating general real property acquisition ........................................... 3
5.1.F - GENERAL ...................................................................................................................................... 4
5.1.F.1 - Personnel functions ................................................................................................................. 4
5.1.F.2 - Preliminary appraisal activity for transportation projects ......................................................... 7
5.1.F.3 - Number of appraisal reports .................................................................................................... 9
5.1.F.4 - Appraisal report assignment .................................................................................................... 9
5.1.F.5 - Contracting for fee appraiser services .................................................................................. 10
5.1.F.6 - Appraisal fee cost estimate less than $25,000.00................................................................. 11
5.1.F.7 - Appraisal fee cost estimate $25,000.00 and above .............................................................. 11
5.1.F.8 - Fee appraiser assignment contract ....................................................................................... 12
5.1.F.9 - Appraisal reports for sale of excess lands ............................................................................ 12
5.1.F.10 - Specialty reports and cost to cure services ......................................................................... 13
5.1.F.11 - Coordination with relocation assistance activities ............................................................... 13
5.1.F.12 - Receipt of completed appraisal reports ............................................................................... 14
5.1.F.13 - Utilizing fee appraiser services............................................................................................ 14
5.1.F.14 - Contracting for appraisal services requiring special expertise ............................................ 15
5.1.F.15 - Appraisal review general information .................................................................................. 15
5.1.F.16 - Preliminary desk review ...................................................................................................... 15
5.1.F.17 - Field review ......................................................................................................................... 16
5.1.F.18 - Final office review ................................................................................................................ 16
5.1.F.19 - Appraisal report approval .................................................................................................... 17
5.1.F.20 - Appraisal report rejection .................................................................................................... 18
5.1.F.21 - Development of value by review appraiser ......................................................................... 19
5.1.F.22 - Appraisal report payment approval ..................................................................................... 19
5.1.F.23 - Specialty report review ........................................................................................................ 19
5.1.F.24 - Appraisal review by a fee review appraiser ......................................................................... 20
5.1.F.25 - Contracting for fee review appraiser services ..................................................................... 20
5.1.F.26 - Appraisal review fee cost estimate $25,000.00 and above ................................................. 21
5.1.F.27 - Concurrence with contracted review value ......................................................................... 21
5.1.F.28 - Non-concurrence with the contract review value ................................................................ 22
5.1.F.29 - Uneconomic remnant determination ................................................................................... 22
5.1.F.30 - Owner and tenant-owned improvements ............................................................................ 22
5.1.F.31 - Appraiser and review appraiser performance evaluations .................................................. 23
5.1.G - Definitions .................................................................................................................................... 23
APPRAISAL STANDARDS ........................................................................................................................ 29
5.2.A - PURPOSE ................................................................................................................................... 29
5.2.B - AUTHORITY ................................................................................................................................ 29
5.2.C - SCOPE ........................................................................................................................................ 29
5.2.D - TRAINING .................................................................................................................................... 29
5.2.E - DOCUMENTS .............................................................................................................................. 29
5.2.E.1 - Mandatory documents ........................................................................................................... 29
5.2.E.2 - Documents to be used relating to appraisal report preparation ............................................ 29
5.2.F - GENERAL .................................................................................................................................... 29
5.2.F.1 - Compliance with USPAP ....................................................................................................... 29
5.2.F.2 - Ethical conduct ...................................................................................................................... 30
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5.2.F.3 - Co-signing ............................................................................................................................. 30
5.2.F.4 - Hypothetical conditions ......................................................................................................... 30
5.2.F.5 - Confidentiality ........................................................................................................................ 30
5.2.F.6 - Jurisdictional exception ......................................................................................................... 31
5.2.F.7 - Property owner contact ......................................................................................................... 31
5.2.F.8 - Appraisal report standards .................................................................................................... 31
5.2.F.9 - Tenant owned improvements ................................................................................................ 33
5.2.F.10 - Non-compensable items ...................................................................................................... 34
5.2.F.11 - Comparable sales data book............................................................................................... 34
5.2.F.12 - Narrative appraisal report .................................................................................................... 35
5.2.F.13 - Specialty reports .................................................................................................................. 40
5.2.F.14 - Form reports ........................................................................................................................ 42
5.2.F.15 - Appraisal report updates ..................................................................................................... 44
5.2.G - DEFINITIONS .............................................................................................................................. 44
WAIVER VALUATION PROCESS ............................................................................................................. 45
5.3.A - PURPOSE ................................................................................................................................... 45
5.3.B - AUTHORITY ................................................................................................................................ 45
5.3.C - SCOPE ........................................................................................................................................ 45
5.3.D - TRAINING .................................................................................................................................... 45
5.3.E - DOCUMENTS .............................................................................................................................. 45
5.3.E.1 - Mandatory documents ........................................................................................................... 45
5.3.E.2 - Documents to be used relating general real property acquisition ......................................... 45
5.3.F - GENERAL .................................................................................................................................... 45
5.3.F.1 - General requirements ............................................................................................................ 45
5.3.F.2 - Applicable use of waiver valuation process .......................................................................... 46
5.3.F.3 - Administrative offer summary preparation ............................................................................ 46
5.3.G - DEFINITIONS .............................................................................................................................. 47
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Section 5.1
APPRAISAL ASSIGNMENT AND APPRAISAL REVIEW
5.1.A - PURPOSE
To set forth standards, requirements, and procedures for assigning real property appraisals and appraisal
review functions for Real Estate Services staff, contracted real estate appraisers and contracted review
appraisers.
5.1.B - AUTHORITY
49 CODE OF FEDERAL REGULATIONS, SECTION 24.102
49 CODE OF FEDERAL REGULATIONS, SECTION 24.103
TITLE 24, CHAPTER 40, SECTION 4007, DELAWARE CODE
TITLE 24, CHAPTER 40, SECTION 4009, DELAWARE CODE
TITLE 29, CHAPTER 69, DELAWARE CODE
TITLE 29, CHAPTER 95, SECTION 9505, DELAWARE CODE
TITLE 29, CHAPTER 95, SECTION 9506, DELAWARE CODE
5.1.C - SCOPE
The principle users of the section are Real Estate Services staff involved in the appraisal and appraisal
review of real property, contracted fee real estate appraisers, contracted fee review appraisers, and Real
Estate Services management.
5.1.D - TRAINING
(a) Only those employees of Real Estate Services or a contracted fee appraiser that has successfully
completed coursework commensurate to the appraisal assignment provided by the Appraisal
Institute or equivalent coursework by an organization as determined equivalent by the Real
Estate Services, Appraisal Services Manager and as well as meeting the requirements to prepare
appraisal reports as allowed by the State of Delaware, Council on Real Estate Appraisers and by
State of Delaware statute can prepare an appraisal report for the Delaware Department of
Transportation.
(b) Only those employees of Real Estate Services or a contracted fee appraiser that has successfully
completed coursework commensurate to the appraisal report technical review assignment
provided by the Appraisal Institute or equivalent coursework by an organization as determined
equivalent by the Real Estate Services, Appraisal Services Manager and as well as meeting the
requirements to prepare appraisal reports as allowed by the State of Delaware, Council on Real
Estate Appraisers and by State of Delaware statute can conduct technical reviews on appraisal
reports and waiver valuations for the Delaware Department of Transportation.
5.1.E - DOCUMENTS
5.1.E.1 - Mandatory documents
(a) The documents listed below and inserted into this subsection is required to achieve a means to
uniformly document appraisal activities.
5.1.E.2 - Documents to be used relating general real property acquisition
(a) Document No. A1, Certificate of Review and Conclusion of Fair Market Value-Acquisition
(b) Document No. A2, Fee Appraiser Estimates
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(c) Document No. A3, Project Real Property Cost Estimate
(d) Document No. A4, Value Finding Report
(e) Document No. A5, Appraisal Report Form
(f) Document No. A6, Fee Appraiser Assignment Contract
(g) Document No. A7, Definition of Value for Specialty Reports
(h) Document No. A8, Example of Master Agreement for Fee Appraisals
(i) Document No. A9, Certificate of Review and Conclusion of Fair Market Value-Disposition
(j) Document No. A10, Appraisal Report Payment Recommendation
(k) Document No. A11, Certificate of Review Concurrence with Contract Review
(l) Document No. A12, Fee Review Appraiser Assignment
(m) Document No. A13, Appraisal Review Fee Schedule
(n) Document No. A14, Certificate of Review and Conclusion of Fair Market Value-Fee Review
Appraiser
(o) Document No. A15, Appraiser and Review Appraiser Evaluation Form
(p) Document No. A21, Assignment Plan
(q) Document No. LT2, 5 Year History Form
(r) Document No. PM5, Summary of DelDOT Procurement Regulations
(s) Document No. PM8, Contractor’s Notice to Proceed
(t) Document No. PM16, Procurement Procedures Quotation Summary
5.1.F - GENERAL
5.1.F.1 - Personnel functions
(a) The Appraisal Services Manager shall:
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Report and be accountable to the Assistant Director, Real Estate Services;
Be a duly licensed Certified General Real Property Appraiser by the State of Delaware
Division of Professional Regulation to prepare real estate appraisals;
Be responsible for the administrative operation of the appraisal and review functions of the
Real Estate Appraisal Services unit;
Develop subordinate staff Performance Plans and reviews on a yearly basis and review staff
needs for future educational needs required for advancement or required certification or
licensing;
Maintain appraisal report and technical review records and controls for all assigned projects
utilizing the section’s Real Estate Management (REM) and Primavera P3 Systems;
Help establish and coordinate with section Acquisition Managers real property cost estimates
in order to determine the need for appraisal services or waiver valuation procedure;
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Submit requests for legal determinations, advice or formal legal opinions for appraisal matters
to the Assistant Director, Real Estate Services;
Assures that all appraisals reports are prepared, received and reviewed in time to meet the
needs of other Real Estate Services units and to meet the Delaware Department of
Transportation’s transportation project advertising schedules;
Directs the review of appraisal reports prepared by fee real estate appraisers and Real Estate
Representatives, for the purpose of accepting or rejecting the appraisals on the basis of form,
required documentation, and reasonable conclusions of fair market value;
Direct and supervise a staff of Real Estate Representatives assigned to do appraisal report
technical reviews and manage appraisal report assignments;
Assign appraisal technical reviews to contract Review Appraisers;
Recommend policies and procedures governing the development and operation of Appraisal
Services unit as provide for under Part 1, General Information of the Real Estate Services
operation manual;
Directs the review of valuation appraisals, documentation, supporting comparable sales and
reasonable conclusions, is accordance with this part and professional real property appraisal
practice;
Insure that Real Estate Representatives and contract Review Appraisers performing
appraisal report technical reviews properly document their conclusions;
Be responsible for initiating and maintaining a process for employing fee appraisers;
Maintain and distribute to appropriate Real Estate Services staff an in force master list of
certified fee appraisers and fee review appraisers to provide appraisal services for the
Delaware Department of Transportation, Real Estate Services section;
Recommend to the Assistant Director, Real Estate Services the removal from the certified list
of fee appraisers and fee review appraisers whose appraisal services are determined not to
meet the requirements set forth in this manual;
Perform the technical reviews and make fair market value determinations;
Annually correlates all staff appraisers, fee appraisers and fee review appraisers
performance into specific categories;
Approves all appraisal services payments;
Recommends staff appraisal training and education as necessary; and
Insures that appropriate staff and fee appraisers, fee review appraisers and appropriate
contracted right of way professionals are informed of any changes to appraisal practice,
procedures, or reporting requirements.
(b) The Real Estate Representative shall:
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Be licensed by the State of Delaware Division of Professional Regulations to perform real
estate appraisals;
In the case of litigation, be able to testify as an expert witness, as necessary;
Report and be accountable to the Appraisal Services Manager;
Assign the preparation of appraisal reports to qualified staff and fee appraisers;
Review completed appraisal reports submitted to insure that the document has been
prepared in accordance with scope of work as detailed in the appraisal assignment;
Process appraisal report preparation fees;
Maintain appraisal records and controls for all assigned projects on a parcel-by-parcel basis,
utilizing the section’s Real Estate Management (REM) System;
Be responsible for supplying Real Estate Representatives and fee appraisers tasked with
appraisal report preparation necessary property and title information, forms, appropriate
Delaware Departmental of Transportation project plans and other applicable information for
appraisal report preparation;
Obtain appraisals for specialty items, estimates for cost to cure, and building inspection
reports from licensed building inspectors, as necessary;
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Notify the property owner that his or her property will be affected by a transportation project
and coordinate the property inspection for appraisal report preparation;
Provide transportation project real property cost estimates including a parcel-by-parcel
estimate of appraisal fees;
Produce appraisal material for condemnation actions as requested by the condemnation
attorney;
Advise the Appraisal Services Manager when a legal opinion is needed for determining real
property versus personal property;
Evaluate and monitor the timely and acceptable completions of appraisal reports to meet
Delaware Department of Transportation’s transportation project requirements and provide
and early notice to the Appraisal Services Manager of appraisal problems, which may risk the
scheduled completion of transportation project appraisal reports; and
Perform a desk review, a field review, and a final office review of the appraisal report to
determine if the assigned real estate appraiser has complied with all pertinent laws, rules,
regulations and the Real Estate Services operation manual.
(c) The Fee Appraiser shall:
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Be licensed by the State of Delaware Division of Professional Regulation to perform real
estate appraisals;
In the case of litigation, be able to testify as an expert witness, as necessary;
Report and be accountable to the Appraisal Services Manager through the task assigning
Real Estate Representative for contracted fee work assignments;
Be courteous and diplomatic in all contacts with the property owner and other individuals;
Not discuss his or her opinion of value with the owner or any other party. The appraiser’s
report is a privileged, confidential communication within the Delaware Department of
Transportation’s Real Estate Services Section;
Obtain appraisals for specialty items, estimates for cost to cure, and building inspection
reports from licensed building inspectors, as necessary;
Notify the property owner that his or her property will be affected by a transportation project
and coordinate the property inspection for appraisal report preparation;
Provide transportation project real property cost estimates including a parcel-by-parcel
estimate of appraisal fees;
Produce appraisal material for condemnation actions as requested by the condemnation
attorney;
Advise the Appraisal Services Manager when a legal opinion is needed for determining real
property versus personal property;
Attend pretrial conferences where parcels are in condemnation and assist in supplying
additional pertinent data to the Delaware Department of Transportation’s condemnation
attorney; and
Make minor corrections to an appraisal report as outline in this part.
(d) The Fee Review Appraiser shall:
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Be licensed by the State of Delaware Division of Professional Regulation to perform real
estate appraisals;
In the case of litigation, be able to testify as an expert witness, as necessary;
Report and be accountable to the Appraisal Services Manager for contract appraisal work
assignment;
Perform a desk review, a field review, and a final office review of the appraisal report to
determine if the assigned real estate appraiser has complied with all pertinent laws, rules,
regulations and this manual;
Approve or establish just compensation in accordance with Federal and State guidelines, as
set forth in this manual;
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Be guided by Federal and State guidelines as set forth in the Real Estate Services operation
manual;
Attend pretrial conferences where parcels are in condemnation and assist in supplying
additional pertinent data to the Delaware Department of Transportation’s condemnation
attorney;
Make minor corrections to an appraisal report as outline in this part;
Prepare appraisals when requested; and
Provide project right of way estimates when requested.
5.1.F.2 - Preliminary appraisal activity for transportation projects
(a) As soon as possible after the receipt of final plans and a notice to proceed from the Assistant
Director, Real Estate Services or the Assistant Chief, Real Estate Services, the Appraisal
Services Manager shall review the plans in the office and in the field with members of his or her
staff. During the field review, the details of the right-of-way plans and construction plans and their
effect on individual parcels are to be observed and noted. He or she will report to the appropriate
District Real Estate Manager on the completeness and adequacy of the plans for the purpose of
proceeding with the assignment of appraisals.
(b) Additionally, the Appraisal Services Manager shall assign a Real Estate Representative the task
of estimating the real property costs for each property interest required utilizing DOCUMENT NO.
A3, PROJECT REAL PROPERTY COST ESTIMATE and upon completion forwarded one copy
onto the Appraisal Services Manager recommending approval. This recommendation shall be
considered by the Appraisal Services Manager who will make the final recommendation to the
District Acquisition Manager as to what parcels shall be valued by the preparation of an appraisal
report or by the use of the Waiver Valuation Process. Items to be considered when establishing
the cost estimate are simple takings, imposition of permanent and/or temporary easements, any
and all site improvements, and damages and shall determine ownership (landowner or tenant) of
any buildings, structures, other improvements or any item of questionable or unique nature
including agricultural crops, located upon the property to be acquired which must be removed or
which will be adversely affected by the project.
(c) Legal determinations, when necessary, as to whether the items are to be considered real
property or personal property shall be requested at this time in order to provide the appraiser with
direction upon his or her assignment.
(d) If fee appraisers, fee review appraisers, or other persons that will provide
information/documentation needed in establishing compensation or other valuation costs are to
be employed, the costs are to be determined and documented utilizing DOCUMENT NO. A2,
FEE APPRAISER ESTIMATES and forwarded onto the Appraisal Services Manager for
approval. The assigned Real Estate Representative shall consider the following factors in
estimating fee appraiser appraisal report preparation costs and shall be based upon:
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The complexity of, and the skills necessary to complete the appraisal report or specialty
report assignment;
The amount of information and documentation provided to the fee appraiser or specialty
expert by the Appraisal Services unit;
The amount of information and documentation being developed independently by the fee
appraiser, the fee review appraiser, or others;
The location and conditions pertinent to the project for which the fee service is to be provided;
and
The time allowed for completion of the appraisal report and the number of appraisals included
in the assignment.
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(e) As an alternative procedure in determining the fee appraiser appraisal report preparation costs as
detailed in 5.1.F.2(c), the Appraisal Services Manager may maintain a schedule of current fees
organized according to the type and complexity of the assignments for which fees have
previously been paid for used by the assigned Real Estate Representative The schedule must be
kept current by updating at least annually. Documentation to support such a schedule shall be
maintained and made available for review by others.
(f) Upon receipt of and approval of DOCUMENT NO. A3, PROJECT REAL PROPERTY COST
ESTIMATE the Appraisal Services Manager shall forward a copy to the appropriate District Real
Estate Manager along with instructions advising which parcels can be valued utilizing the Waiver
Valuation Process. The Appraisal Services Manager shall forward a copy of DOCUMENT NO.
A2, FEE APPRAISER ESTIMATE and DOCUMENT NO. A3, PROJECT REAL PROPERTY
COST ESTIMATE to the Assistant Chief, Real Estate Services. The Appraisal Services Manager
shall insure that these documents are placed into the project’s General Project File. This
recommendation shall be based on the total estimated cost for acquisitions, parcel by parcel, of
any and all parcels on the specified project.
(g) Upon receipt of DOCUMENT NO. A2, FEE APPRAISER ESTIMATE and DOCUMENT NO. A3,
PROJECT REAL PROPERTY COST ESTIMATE, the Assistant Chief, Real Estate Services shall
compare these cost estimates to the last published cost estimate by the Department of
Transportation. If there is a significant difference between the two cost estimates, the Assistant
Chief, Real Estate Services shall, in writing, recommend to the Department that an adjustment be
made to the financing of the project to insure that acquisition activities can be completed on the
project.
(h) There may be instances prior to receiving authorization to begin acquisition activities for a
transportation project that an appraisal report may be required on one or more parcels. In those
instances and upon written instruction from the Assistant Director, Real Estate Services, the
Appraisal Services Manager shall assign a Real Estate Representative to undertake preliminary
appraisal activities prior to an actual appraisal report preparation assignment. Upon receipt of the
assignment, the assigned Real Estate Representative shall:
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Obtain and review Semi-final Right of Way Plans to determine if the plan reflects enough
information on the parcel or parcels affected by the assignment so as to determine if enough
information is on the plan that can be provided to the appraiser for appraisal report
preparation or if the plan does not have enough information or there are no Semi-final Right
of Way Plans, the assigned Real Estate Representative shall proceed to have the parcel or
parcels surveyed and have a Land Inventory Plot(s) prepared as described in 7.1.F.5;
Arrange for the assemblage of property histories and property deeds and prepare a 5-year
property history for each affected property using DOCUMENT NO. LT2, 5 YEAR PROPERTY
HISTORY FORM and determine if title services are required. If determined that title services
are required, the assigned Real Estate Representative shall request the Assistant Chief, Real
Estate Services to order a title report as described in 4.1.F.6(b). If the record reveals any
information which might affect the appraiser’s determination of value, it shall be supplied to
the appraiser upon assignment or shortly thereafter, but prior to the completion of the
appraisal; and
Provide to the Appraisal Services Manager an estimated cost for all appraisal tasks needed
to have the property or properties appraised.
(i) Upon receipt of the cost estimate, the Appraisal Services Manager shall request funding for the
appraisal tasks as described in 10.2.F.3.
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5.1.F.3 - Number of appraisal reports
(a) Upon receipt of a notice to proceed from the Assistant Director, Real Estate Services or the
Assistant Chief, Real Estate to undertake valuation services requiring the preparation of appraisal
reports for a transportation project related acquisition, preparation of an appraisal report for an
individual property or a request from the Operation Support Manager requiring valuation services
relating to disposition or relocation assistance activities, the Appraisal Services Manager shall
direct a Real Estate Representative to coordinate and manage the preparation of appraisal
reports for the necessary valuation activity.
(b) Upon direction from the Appraisal Service Manager, the assigned Real Estate Representative
Shall assign and obtain the necessary number of appraisal reports as follows:
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A minimum of one appraisal report shall be prepared for each property or property interest
required; or
Two appraisal reports may be prepared for each property or property interest required at the
discretion of the assigning Real Estate Representative.
(c) Two separate appraisal reports should be obtained in every instance where:
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Offsetting special benefits are expected to accrue to the remaining property; or
Damages are expected to accrue to the remaining property and compensation is anticipated
to be in excess of $500,000.00; or
An abundance of comparable market data is not available and compensation is anticipated to
be in excess of $500,000.00.
(d) The Appraisal Services Manager, in writing can request from the Assistant Director, Real Estate
Services a waiver of the two appraisal report requirements set forth in 5.1.F.3 (b). The written
request shall detail the reasoning as to the waiver request.
(e) More than two appraisals reports may be obtained for property or property interest by specific,
written authorization of the Assistant Director, Real Estate Services. If more than two appraisals
are considered appropriate, the Real Estate representative assigned to obtain appraisal reports
shall submit, in writing, the recommendation to the Appraisal Services Manager. If the Appraisal
Services Manager concurs with the recommendation, he or she shall forward the request to the
Assistant Director, Real Estate Services. The written request shall detail the reasoning as to the
appraisal request.
5.1.F.4 - Appraisal report assignment
(a) Once the assigned Real Estate Representative has examined the project plans and made a field
inspection of each parcel to be appraised, he or she shall proceed with the assigning of appraisal
reports based upon his or her estimate of anticipated compensation.
(b) If compensation involves only realty improvements losses, which can be measured by the cost to
cure method, the assigned Real Estate Representative may assign to a qualified member of the
Appraisal Services unit or a Delaware Department of Transportation approved fee appraiser the
task of appraising the property interest required using a Summary Report format or DOCUMENT
NO. A4, VALUE FINDING REPORT.
(c) If compensation is anticipated to involve more than only realty improvement losses, which can be
measured by the cost to cure method but allows the use of a Fannie Mae Form report or any
other form acceptable to the Delaware Department of Transportation which meets the scope of
needs, the assigned Real Estate Representative shall assign the preparation of the appraisal
report to a Delaware Department of Transportation approved fee appraiser, unless a qualified
member of the Appraisal Services unit is available to perform the assignment; or
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(d) If 5.1.F.4(b) or 5.1.F.4(c) do not apply, and after determining in consultation with the Appraisal
Services Manager the necessity of a detailed, Narrative Report as described in 5.2.F.12, he or
she shall assign the preparation of the appraisal report to a Delaware Department of
Transportation approved fee appraiser.
(e) The assigned Real Estate Representative for each appraisal assignment shall develop a Scope
of Work Statement. The Scope of Work Statement should be prepared using DOCUMENT NO.
A21, ASSIGNMENT PLAN and to include the purpose of the appraisal, identification of the
intended use and intended user, function of the appraisal, a definition of the estate being
appraised (i.e., fee, easement, temporary construction easement, etc.) and if it is for market
value, the applicable definition of value, and the assumptions and limiting conditions affecting the
appraisal.
(f) The extent of the Scope of Work Statement depends on the circumstances of each acquisition
and should be developed cooperatively by the assigned appraiser and the assigned Real Estate
Representative in order to represent the Delaware Department of Transportation’s needs.
(g) It may include the parameters of the data search and the extent of market data confirmation and
including identification of the technology references relied upon in making the appraisal (i.e.,
MLS, County Assessment Records, etc.).
(h) When the appraisal report preparation assignment includes the acquisition of improvements, the
scope of work shall include instructions that in the appraisal report identify of items of personal
property and real property. And when applicable to include instructions to delineate those items
owned by the owner and by a tenant.
(i) The applicability of all approaches to value should be discussed and the exclusion of any
approach to value should be explained. The adoption of a hypothetical condition or an
extraordinary assumption by the appraiser shall be clearly explained along with the implications of
such hypothetical condition or extraordinary assumption.
(j) The scope of work should consider the specific requirements in this part of the Real Estate
Manual. The assigned appraiser may recommend modifications to the initial Scope of Work
Statement, but only upon concurrence by the Appraisal Services Manager.
(k) Any question as to whether certain fixtures or equipment, etc. are realty or personalty will be
submitted to the Assistant Director, Real Estate Services who, in concert with legal counsel, shall
have a determination made.
(l) If the appraiser, after he or she has examined the appraisal problem, determines that the
appraisal format requested by the assigned Real Estate Representative is not suitable for the
appraisal problem being addressed, he or she shall immediately so notify the assigned Real
Estate Representative so that the appraisal assignment can be reconsidered.
5.1.F.5 - Contracting for fee appraiser services
(a) All applicable federal, state, county, and local laws and regulatory procedures shall be followed in
the employment on a fee basis of real estate appraisers.
(b) Employment of a real estate appraiser can only be that of an individual who has been approved
by the Delaware Department of Transportation to be qualified to provide appraisal services and
the contracting of an approved fee appraiser shall be in accordance with:
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Delaware Department of Transportation Procurement Procedures;
10.5.F.6;
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The estimated dollar amount established for appraisal services as described in 5.1.F.2(d)
utilizing completed DOCUMENT NO. A2, FEE APPRAISER ESTIMATES for an appraisal
contract is the determining factor for the contracting procedure to be used.
(c) Employment of Delaware Department of Transportation approved fee appraisers shall be based
upon their ability to perform the assignment, qualifications, background, past performance and
availability.
(d) If the estimated fee is less than $25,000.00, the assigned Real Estate Representative shall:
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Contact fee appraisers qualified to perform the appraisal service required requesting fee and
completion date proposals to include a final submission date for the proposals and the Scope
of Work Statement;
Upon receipt of the proposals and if the fees quoted are in line with the estimated fee or fees,
the assigned Real Estate Representative shall select the appraiser. If the quoted fee
substantially differs from the estimated fee and the assignment is made, the parcel file shall
be documented to explain and justify the difference;
Upon selection, the fee appraiser shall be sent DOCUMENT NO. A6, FEE APPRAISER
ASSIGNMENT CONTRACT, which will set forth the fee, the date of completion, and the
scope of the appraisal report required. The selected fee appraiser accepts the assignment by
returning a signed copy to the assigned Real Estate Representative within the time specified
on the contract.
(e) If the estimated fee is above $25,000.00, the assigned Real Estate Representative shall follow
the procedures set forth in 5.1.F.7.
5.1.F.6 - Appraisal fee cost estimate less than $25,000.00
(a) The assigned Real Estate Representative shall:
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Confirm that funds are available to finance the estimated cost of appraisal;
Obtain the required quotations for the appraisal services necessary as described in 5.1.F.5
(d) through (f);
Preside at any necessary pre-bid meetings;
Records the required quotations utilizing DOCUMENT NO. PM16, PROCUREMENT
PROCEDURES QUOTATION SUMMARY;
Approve or request approval of the low bid as described in 10.5.F.7(d).
(b) When appropriate, the assigned Real Estate Representative can reject any and all bids.
5.1.F.7 - Appraisal fee cost estimate $25,000.00 and above
(a) When the cost estimate for fee appraisal services is $25,000.00 or above a contract shall be
processed by public advertisement and formal bidding through the Delaware Department of
Transportation’s Contract Administration Section.
(b) When appraisal services on a per parcel basis is estimated at $25,000.00 and above, the
assigned Real Estate Representative shall:


Prepare a memorandum with an attached copy of DOCUMENT NO. A2, FEE APPRAISER
ESTIMATES to the Appraisal Services Manager requesting that funding be put in place for
the advertising of the formal bidding process;
Confirm that funds are available to fund the estimated cost of appraisals. If funds are not
available, proceed in accordance with the applicable paragraphs in 10.2.F.3;
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Submit an appraisal services contract specification, scope of work statement and cost
estimate via the Appraisal Services Manager to the Contract Manager located in the
Department’s Contract Administration Section requesting the public advertisement of the
proposed work;
Attend any necessary pre-bid meeting;
Upon receipt of the bid tabulation form the Contract Manager, recommend, in writing,
acceptance or rejection of the bid and submit it to the Appraisal Services Manager.
(c) The Appraisal Services Manager shall:
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
Recommend, in writing, acceptance or rejection of the low bid submitted and submit the
recommendation to the Delaware Department of Transportation’s Division of Finance’s
Finance Director with a copy to the Contract Manager, allowing sufficient time for the contract
to be awarded within 30 calendar days of the bid opening:
Upon approval forward two fully executed original contracts onto the assigned Real Estate
Representative.
(d) The assigned Real Estate Representative shall:

Upon receipt of the approved Project Authorization and Funding Form (FS-1), a copy of the
award letter, DOCUMENT NO. PM8, CONTRACTOR’S NOTICE TO PROCEED, and a copy
of the executed contract as approved shall be forwarded to the successful bidder by certified
mail.
5.1.F.8 - Fee appraiser assignment contract
(a) The contract to the appraiser shall include and if available, but not limited to, the following:

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Owner’s Name;
Project and Parcel Numbers;
Legal Description or Land Inventory plot;
Property rights to be acquired;
Project right-of-way plans;
Project construction plans;
List of non-compensable damage items;
Advice as to proposed grades and other conditions affecting the property;
All necessary appraisal forms;
Advice on recognized rulings regarding effects of benefits;
Identification of buildings, structures, other improvements or items, e.g. crops owned by
tenant but to be considered as real property and valued for their contributory value and
orderly liquidation value. (Compensation to tenants shall be the greater of these two values
established);
All pertinent information such as easements and utility encumbrances normally obtained by a
title search or indicated on the plans affecting the value of the property, together with a copy
of the property deed.
5.1.F.9 - Appraisal reports for sale of excess lands
(a) Appraisal report preparation for the sale of state-owned excess land under the control of the
Delaware Department of Transportation shall be as follows:

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When the estimated value of the property is $10,000.00 or less, either a qualified Real Estate
Services employee or a qualified fee appraiser shall perform the appraisal;
When the estimated value of the property is in excess of $10,000.00, a qualified appraiser
shall perform the appraisal;
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
The appraisal report shall be reviewed and approved by an individual qualified to review and
approve the appraisal report.
5.1.F.10 - Specialty reports and cost to cure services
(a) If the preparation of an appraisal report involves the need for supplemental specialty item
determinations, the need for costs to cure estimates, or formal building inspection reports,
prepared by licensed building inspector, etc., the assigned Real Estate Representative will
contract for the necessary technical evaluation related services and shall be solicited as
described in 10.2.F.2.
(b) The use of specialty reports from local regular suppliers of specialized services or recognized
cost data sources for items such as fencing, landscaping, shrubbery, paving, roofing, septic
systems, etc. is not usually necessary when an estimate for incorporation into an appraisal report
to justify the value or realty improvements being acquired is being obtained by the assigned real
estate appraiser.
(c) If the information as to the value or determination is submitted exceeds $50,000.00, another
valuation or determination must be obtained with the exception of those items being valued for
relocation assistance purposes.
(d) This specialty evaluation or valuation determination when completed must be submitted to the
assigned Real Estate Representative who will submit it to the Real Estate Representative
assigned by the Appraisal Services Manager to perform a review of the specialty report to
determine its acceptability. If it meets requirements of the scope provided, the assigned Real
Estate Representative will forward it to the individual assigned to prepare the appraisal report for
analysis and incorporation into his or report to the extent deemed appropriate and shall initiate
the process for payment of the services provided as described in 10.2.F.4.
(e) The assigned Real Estate Representative, in writing, must advise the appraiser not to finalize his
or her appraisal report until he or she receives necessary specialty reports.
(f) DOCUMENT NO. A7, DEFINITION OF VALUES FOR SPECIALTY REPORTS shall be given to
the specialty appraiser at the time of assignment.
(g) When properties are acquired on which buildings or structures may be allowed to remain and the
buildings or structures are not new or nearly new, the assigned Real Estate Representative may
employ the services of a licensed building inspector for appropriate building or structural
inspection.
(h) When part of a building, improvement or any item considered to be real property lies within the
required right-of-way, whether it is owned by a tenant or landowner, a cost to cure estimate and
building inspection report may be obtained by the assigned Real Estate Representative in order
to consider the feasibility of curing the building, structure, or improvement versus purchasing the
improvement in total for removal. The appraiser shall weigh the information and costs of his or
her determination of the feasibility to cure the building/improvement or to acquire it in its entirety
for removal or demolition. The appraiser’s determination will be based upon cost effectiveness.
5.1.F.11 - Coordination with relocation assistance activities
(a) When it is determined that relocation assistance activities will be part of the acquisition process of
a parcel. The assigned Real Estate Representative shall coordinate with the acquiring District
Real Estate unit, the individual assigned to prepare the appraisal report, and the individual
assigned to prepare any specialty reports being prepared for relocation assistance purposes:

The inspection of the property;
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The appraisal report shall contain a list personal property situated on the parcel when
applicable and as provide for under the Delaware relocation assistance statute and
applicable federal regulation;
The establishment of the value in place of personal property when requested by the acquiring
District Real Estate unit.
(b) When relocation activities are required on a parcel, the assigned Real Estate Representative
shall be provide a copy of the fully executed DOCUMENT NO. A6, FEE APPRAISER
ASSIGNMENT CONTRACT to the Real Estate Representative assigned the relocation case.
5.1.F.12 - Receipt of completed appraisal reports
(a) Upon receipt of an appraisal report and prior to forwarding the report to the Appraisal Services
Manager for an in-depth review, the assigned Real Estate Representative shall conduct a cursory
review of the completed appraisal report to insure that an acceptable format was followed, all
required support material is included, and the appraisal question has been answered.
(b) The assigned Real Estate Representative shall forward the acceptable appraisal report to the
Appraisal Services Manager who shall assign the appraisal report review.
5.1.F.13 - Utilizing fee appraiser services
(a) Real Estate Services utilizes contracted fee appraisers for the preparation of appraisal reports
through an open-end contract. Open-end contracts are established to create a pool of fee
appraisers that may be utilized for the preparation of appraisal reports. Each open-end contract
shall have an end date.
(b) Fee appraisers are selected by a competitive selection process. The selection process is initiated
by the Assistant Director, Real Estate Services by submitting a request for consultant services to
the Secretary of the Delaware Department of Transportation. Once the Secretary approves the
request, the appraiser selection process may begin.
(c) The Appraisal Services Manager manages the selection process through the Delaware
Department of Transportation’s Contract Administration Section. Detailed requirements for the
selection process may be found in the DelDOT Professional Services Procurement Manual.
(d) Interested appraisers submit evaluation packages based on requirements outlined in the Request
for Qualification advertisement. A selection team then evaluates the packages and a ranking is
established. Appraisers are selected to establish a broad pool. The selected appraisers then
enter into an agreement with the Delaware Department of Transportation, which outlines the
general terms of employment (See DOCUMENT NO. A8, EXAMPLE OF MASTER
AGREEMENT FOR FEE APPRAISERS.
(e) Only those fee appraisers who have an active Delaware Department of Transportation Master
Agreement For Fee Appraisers agreement can be utilized when the assigned Real Estate
Representative determines that fee appraisers will be required for the preparation of appraisal
reports, unless special expertise not available in the pool is required.
(f) The pool includes fee appraisers that have been qualified to practice in various appraisal
disciplines. Assignments should be distributed among fee appraisers to insure that all fee
appraisers are given adequate opportunity to perform assigned work. The Appraisal Services unit
shall maintain a current list of pool fee appraisers and their qualifications.
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5.1.F.14 - Contracting for appraisal services requiring special expertise
(a) Some appraisal assignments may require expertise or experience not available by qualified Real
Estate Services staff or from the fee appraiser pool created by the open-end contract. In these
instances an individual selection process will need to take place.
(b) When this situation exists, the assigned Real Estate Representative shall advise the Appraisal
Services Manager, who shall in turn request, in writing from the Assistant Director, Real Estate
Services approval to utilize a real estate appraiser not on staff or in the fee appraiser pool. The
writing shall set forth the reason as to the need to employ an individual already not approved to
provide appraisal services.
(c) The process for contracting varies depending on whether the estimated assignment value is
under $50,000. Selection procedures are similar to the process for selection of the open-end
contract and should follow guidelines set forth in the DelDOT Professional Services Procurement
Manual.
5.1.F.15 - Appraisal review general information
(a) The Real Estate Services Section’s appraisal review functions are accomplished under the
overall direction of the Assistant Director, Real Estate through the section’s Appraisal Services
unit with subordinate responsibilities assigned to the Appraisal Services Manager, qualified Real
Estate Representatives and contracted fee review appraisers.
(b) The purpose of a Technical Review of an appraisal report or Administrative Offer Summary is to
correlate the established opinion of estimated market value to a meaningful and useful
recommendation:
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Of just compensation to the owner of property required for the public use; or
Of an amount established for the disposition of real property no longer needed by the
Delaware Department of Transportation; and
To explain any minor errors, grammatical, factual, or mathematical, that does not have an
impact on the value conclusion but should be explained to the owner as part of the offer
presentation by the acquiring District Acquisition unit.
(c) The review procedure consists of a Preliminary Desk Review, Field Review, and a Final Office
Review.
(d) Upon receipt of an appraisal report, the Appraisal Services Manager will assign the report to a
qualified Real Estate Services staff member or to a qualified contract review appraiser to conduct
the Technical Review
5.1.F.16 - Preliminary desk review
(a) The Preliminary Desk Review shall consist of checking the following items:
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Appraisal completeness; that the appraiser has responded to all applicable appraisal
procedures in accordance with Department appraisal requirements and following the
guidelines and provisions of State and Federal law;
Mathematical errors;
Basic appraisal theory; the value approaches used and their applicability to the appraisal
problem;
Examine the economic history of the project area and neighborhood prior to the
announcement of the project to determine, if possible, whether there has been an increase or
decrease in the fair market value of real property prior to the date of valuation, caused by the
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public improvement of which such property is to be acquired or by the likelihood that the
property would be acquired; other than that due to physical deterioration within the
reasonable control of the owner. If there has been any decrease or increase, it shall be
disregarded in establishing compensation for the property;
Correlation of data cited in the report in relation to the Department’s right-of-way plans,
profiles and construction details, etc.;
That the appraiser has considered, listed and evaluated compensable items under State law
and has also mentioned, if necessary, noncompensable items.
In the case of a partial acquisition, the loss in value to the remainder (damages) and/or the
appreciation in value to the remainder (benefits) have been considered. Also that all
compensable items located within the area to be acquired and those compensable items to
the remaining parcel outside of the acquisition area but affected by the acquisition have been
plotted, photographed, and itemized in the report and have been considered and evaluated.
A listing in the report, when applicable, personal property situated within the area of
acquisition;
Proper consideration for specialty items has been considered;
Evidence that proper interest was appraised and sufficient correlation and conclusion were
reached logically;
A sound definition of the appraisal problem including recognition and consideration of all legal
aspects concerning the value of the subject.
5.1.F.17 - Field review
(a) The purpose of the Field Review shall be to determine how well the appraiser has related the
subject in terms of its similarity to comparable properties that have sold or rented in the past and
their probable value as of the date of the appraisal, based on current economic trends. The Field
Review shall consist of the following items:
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When applicable, inspect the comparable sales, rentals and listing for sale or rent. Where
improved properties are used, the assigned Real Estate Representative or fee review
appraiser should endeavor to make an interior inspection, if possible;
Inspect the subject property;
The general neighborhood shall be inspected so as to develop and verify the economic trend.
The assigned Real Estate Representative or fee review appraiser should not only be familiar
with the comparable sales but also the general real estate market in the subject area.
(b) If applicable, the assigned Real estate Representative or fee review appraiser must also Field
Review the income capitalization and cost approach by:
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Verifying the cost data and comparing it to current local construction costs.
Verifying the economic rent of comparable properties, the interest rate of return, and a check
of the reliability of the operating statements.
(c) After a field study of the neighborhood, local zoning practices, utilities and services, and physical
characteristics of the land, a verification of the highest and best use should be made.
5.1.F.18 - Final office review
(a) The Final Office Review shall consist of the following items:
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Verification of the appraiser’s competency in terms of how well the appraiser has defined the
problem and how well he or she has made adjustments to the sales. All analyses,
conclusions, adjustments, logic, and reasoning are all re-reviewed at this time to establish the
appraiser’s competency and final value estimate;
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For partial acquisitions, the basis for benefits and damages should be justified and, where
possible, supported by actual market studies. Reference to severance damage studies shall
be examined and reviewed. Where damages accrue to the remainder and where the cost to
cure has been used, a careful check of the soundness of the application of this method and
verification all costs incidental to its use shall be examined.
(b) When necessary, minor corrections to the appraisal report are to be made and supplement the
appraisal file when the following information has been omitted:
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Mathematical errors not affecting final value conclusions;
Project and/or parcel numbers;
Owner and/or tenant names;
Location, zoning or present use of the subject property or comparable sales;
Parties to the transaction, date of purchase and deed recordation references on a sale of a
subject property and comparable sales;
Statement that there were no sales of the subject property in the past five (5) years.
(c) If the appraisal report, upon completion of the review fails to meet minimum Federal and State
guidelines because of serious omissions, the individual conducting the review will return a copy of
the appraisal report along with a letter of transmittal to the appraiser with a request for additional
data and explanation, etc. A copy of the transmittal letter shall be sent to the Real Estate
Representative who assigned the preparation of the appraisal report and the Appraisal Services
Manager.
(d) If the appraiser cannot provide a satisfactory level of performance, the individual conducting the
review shall forward to the Appraisal Services Manager the appraisal report in question along with
all other supporting documentation and a memorandum stating that:
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The appraisal report cannot be approved; and
Set forth the reasons as to why he or she cannot approve the appraisal report.
(e) Upon receipt and review of the documentation provided as described in 5.1.F.18(d), the Appraisal
Services Manager shall proceed in accordance with 5.1.F.19(d) or 5.1.F.20.
5.1.F.19 - Appraisal report approval
(a) If approved by the individual conducting the review. The final decision as to value will be indicated
by utilizing:
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And in the case of a property acquisition, DOCUMENT NO. A1, CERTIFICATE OF REVIEW
AND CONCLUSION OF FAIR MARKET VALUE-ACQUISITION or DOCUMENT NO. A14,
CERTIFICATE OF REVIEW AND CONCLUSION OF FAIR MARKET VALUE-FEE REVIEW
APPRAISER and attach to the document all appraisals which have been approved for
negotiations. Where appropriate, the document shall contain a statement identifying
separately held ownership interest in the real property appraised when the value of such
interest is not included in the conclusion of fair market value; or
In the case of a property disposition, DOCUMENT NO. A9, CERTIFICATE OF REVIEW AND
CONCLUSION OF FAIR MARKET VALUE-DISPOSITION
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(b) The individual who reviewed and approved value, i.e., his or her determination of just
compensation for the property or property interest to be acquired must be set forth in the
Correlation portion of DOCUMENT NO. A1, CERTIFICATE OF REVIEW AND CONCLUSION OF
FAIR MARKET VALUE-ACQUISITION or DOCUMENT NO. A14, CERTIFICATE OF REVIEW
AND CONCLUSION OF FAIR MARKET VALUE-FEE REVIEW APPRAISER or DOCUMENT
NO. A9, CERTIFICATE OF REVIEW AND CONCLUSION OF FAIR MARKET VALUEDISPOSITION a written statement which also, as appropriate, describes the following:
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Identifies all appraisal report(s) reviewed;
Identifies damages, i.e. loss in value to the remaining property, or benefits to the remaining
property in case of a partial acquisition;
Identifies or lists the buildings, structures or other improvements on the land, as well as the
fixtures which he or she considered to be a part of the real property to be acquired, if such
listing differs from that of the appraisal reports(s);
Identifies the approved value of items compensable under State law, but not eligible for
Federal reimbursement, if and;
Allocate separately owned property rights (owner, tenant) and the respective amounts of
compensation for each;
Contain an explanation necessary to support the approved value. The extent of the
explanation depends upon the complexity of the appraisal problem. For low value property
requiring an uncomplicated process, the individual’s approval endorsing the appraiser’s
appraisal report, may satisfy the written correlation requirement.
(c) The assigned Real Estate Representative or a contracted fee review appraiser’s completion and
approval of the appraisal report shall forward the appraisal report along with all other
documentation to the Appraisal Services Manager.
(d) The Appraisal Services Manager shall:
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In the case of a property acquisition with no relocation activity, provide a copy of the appraisal
report along with the completed DOCUMENT NO. A1, CERTIFICATE OF REVIEW AND
CONCLUSION OF FAIR MARKET VALUE-ACQUISITION to the acquiring District Real
Estate Manager; or
In the case of a property acquisition with relocation activity, provide two copies of the
appraisal report along with the completed DOCUMENT NO. A1, CERTIFICATE OF REVIEW
AND CONCLUSION OF FAIR MARKET VALUE-ACQUISITION to the acquiring District Real
Estate Manager; or
In the case of a property disposition, provide a copy of the appraisal report along with the
completed DOCUMENT NO. A9, CERTIFICATE OF REVIEW AND CONCLUSION OF FAIR
MARKET VALUE-DISPOSITION to the Operation Support Manager.
(e) A copy of the appraisal report along with all pertinent documentation shall be placed into an
Appraisal File.
5.1.F.20 - Appraisal report rejection
(a) When the Appraisal Services Manager determines that an appraisal report should be rejected, he
or she shall:
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Prepare a letter to the individual who prepared the report. The content of the letter shall state
that his or her report has been rejected and shall set forth the reasoning why the report was
rejected and advise the appraiser that payment is not authorized, and that while all copies of
the report and invoices are being returned, the Department for documentation purposes is
retaining a photocopy;
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Attach a copy of the notice to the appraiser and a copy of the appraiser’s invoice to the
reproduced copy of the appraisal report in the Appraisal File;
Send copies of the rejection notice to the appropriate District Acquisition Manager;
Attach the original of the appraisal rejection letter to a reproduced copy of the appraisal report
and place them in the Appraisal File;
Upon issuance of the rejection notice to the appraiser, the Appraisal Services Manager shall
notify the Real Estate Representative who assigned the report preparation of the rejection
and advise him or her to proceed with a new appraisal assignment to replace the rejected
report.
(b) When the Appraisal Services Manager determines that an appraisal report should not be
rejected, he or she shall advise, by memorandum, the assigned individual who reviewed the
report as to why the report will not be rejected.
5.1.F.21 - Development of value by review appraiser
(a) If an individual assigned to review an appraisal report is unable to recommend approval or
approve an appraisal report as an adequate basis for the establishment of the offer of just
compensation, and it is determined by the Appraisal Services Manager that it is not practical to
obtain an additional appraisal, the assigned individual shall, as part of the review, present and
analyze market information in conformance to support a recommended or approved value.
(b) In developing an independent approved or recommended value, the review appraiser may
reference any acceptable resource, including acceptable parts of any appraisal, including an
otherwise unacceptable appraisal. When a review appraiser develops an independent value,
while retaining the appraisal review, that independent value also becomes the approved appraisal
of the fair market value. It is within the Assistant Director, Real Estate Services discretion to
decide whether a second review is needed if the first review appraiser establishes a value
different from that in the appraisal report or reports on the property.
5.1.F.22 - Appraisal report payment approval
(a) Ultimately the individual, who conducted the review decision, whether by an assigned Real Estate
Representative or an individual contracted to conduct a review, will place the report into one of
the following classifications utilizing DOCUMENT NO. A10, APPRAISAL REPORT PAYMENT
APPROVAL:
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Appraisal approved;
Appraisal meets minimum requirements;
Waiting on second appraisal;
Other – waiver.
(b) After an appraisal report has been placed in one of the categories listed above by the individual
who has conducted the review, he or she shall forward DOCUMENT NO. A10, APPRAISAL
REPORT PAYMENT APPROVAL to the Real Estate Representative who made the appraisal
report assignment.
(c) Upon receipt of DOCUMENT NO. A10, APPRAISAL REPORT PAYMENT APPROVAL, the
assigning Real Estate Representative shall process the payment as describe in 10.2.F.4.
5.1.F.23 - Specialty report review
(a) All specialty reports are to be reviewed before they are distributed to a contract fee appraiser or
an assigned Real Estate Representative for analysis and incorporation into the appraisal report
for which the specialty report has been prepared.
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(b) The individual conducting the review shall conduct a field inspection of the subject. If this is not
made available, the file shall so indicate.
(c) Before distribution to the assigned appraiser, the individual conducting the review shall examine
the report to determine that it:
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Is complete in accordance with the requirements outlined in the assignment;
Follows accepted principles and technique for the valuation of the subject of the report;
Contains information necessary to explain, substantiate, and thereby document the
conclusions and estimates of the value contained therein; and
Includes consideration of compensable items and does not include compensation for items
noncompensable under State of Delaware statute;
In those instances when a fee appraiser has retained a specialist and incorporated the
specialist’s report in his or her appraisal report, the review of the “package” shall be in
accordance with the applicable review requirements contained in 5.1.F.10.
5.1.F.24 - Appraisal review by a fee review appraiser
(a) Contracted appraisal review activities will be conducted in the same manner as when a Real
Estate Representative is assigned a review of an appraisal report, except the contracted Fee
Review Appraiser must conclude to a suggested but not recommended compensation amount
utilizing DOCUMENT NO. A11, CERTIFICATE OF CONCURRENCE WITH CONTRACT
REVIEW.
(b) When necessary, the contract Fee Review Appraiser may add supplemental certification
statements required by professional organizations. Any supplement certification shall be included
as a separate signed page(s).
5.1.F.25 - Contracting for fee review appraiser services
(a) All applicable federal, state, county, and local laws and regulatory procedures shall be followed in
the employment on a fee basis of real estate appraisers contracted to conduct technical reviews.
(b) Employment of a real estate fee review appraiser can only be that of an individual who has been
approved by the Delaware Department of Transportation to be qualified to provide appraisal
review services and the contracting of an approved fee review appraiser can only be made by the
Appraisal Services Manager and shall be in accordance with the Delaware Department of
Transportation Procurement Procedures.
(c) Employment of Delaware Department of Transportation approved fee review appraisers shall be
based upon their ability to perform the assignment, qualifications, background, past performance
and availability.
(d) If the estimated fee is less than $25,000.00, the Appraisal Services Manager shall:
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Contact fee review appraisers qualified to perform the appraisal review service required
requesting fee and completion date proposals to include a final submission date for the
proposals;
Upon receipt of the proposals and if the fees quoted are in line with the estimated fee or fees,
the Appraisal Services Manager shall select the appraiser. If the quoted fee substantially
differs from the estimated fee and the assignment is made, the parcel file shall be
documented to explain and justify the difference;
Upon selection, the fee review appraiser shall be sent DOCUMENT NO. A12, FEE REVIEW
APPRAISER ASSIGNMENT CONTRACT, which will set forth the fee and the date of
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completion. The selected fee review appraiser accepts the assignment by returning a signed
copy to the Appraisal Services Manager within the time specified on the contract.
(e) If the estimated fee is above $25,000.00, the Appraisal Services Manager shall follow the
procedures set forth in 5.1.F.
(f) When appropriate, the Appraisal Services Manager can reject any and all bids.
5.1.F.26 - Appraisal review fee cost estimate $25,000.00 and above
(a) When the cost estimate for fee appraisal services is $25,000.00 or above, a contract shall be
processed by public advertisement and formal bidding through the Delaware Department of
Transportation’s Contract Administration Section.
(b) When appraisal services on a per parcel basis is estimated at $25,000.00 and above, the
Appraisal Services Manager shall:
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Prepare a memorandum with an attached copy of DOCUMENT NO. A13, APPRAISAL
REVIEW FEE SCHEDULE to the Assistant Chief, Real Estate Services requesting that
funding be put in place for the advertising of the formal bidding process;
Confirm that funds are available to fund the estimated cost of appraisals. If funds are not
available, proceed in accordance with the applicable paragraphs in 10.2.F.3;
Submit an appraisal services contract specification, scope of work statement and cost
estimate to the Contract Manager located in the Department’s Contract Administration
Section requesting the public advertisement of the proposed work;
Attend any necessary pre-bid meeting;
Upon receipt of the bid tabulation from the Contract Manager, recommend, in writing,
acceptance or rejection of the low bid submitted and submit the recommendation to the
Delaware Department of Transportation’s Division of Finance’s Finance Director with a copy
to the Contract Manager, allowing sufficient time for the contract to be awarded within 30
calendar days of the bid opening:
Upon approval forward two fully executed original contracts onto the low bidder along with a
letter requesting the low bidder to return the two originals back to the Appraisal Services
Manager upon his or her execution of the two original contracts;
Upon the return of the two original contracts and upon receipt of the approved Project
Authorization and Funding Form (FS-1), a copy of the award letter, DOCUMENT NO. PM8,
CONTRACTOR’S NOTICE TO PROCEED, and a copy of the fully executed contract as
approved shall be forwarded to the successful bidder by certified mail.
5.1.F.27 - Concurrence with contracted review value
(a) Upon receipt of an acceptable review of an appraisal report from a contracted Fee Review
Appraiser, the Appraisal Services Manager shall either:


Concur with the contract Fee Review Appraiser’s suggestion for compensation utilizing
DOCUMENT NO. A11, CERTIFICATE OF CONCURRENCE WITH CONTRACT REVIEW
and attach to the appraisal report along with placement of a copy into the appraisal file;
Process the payment by following the relevant provisions set forth in 10.2.F.4.
(b) When a concurrence to the suggested value has been approved, the Appraisal Services Manager
shall transmit the appraisal report along with all required attachments to the appropriate District
Acquisition Manager so as to begin the acquisition process.
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5.1.F.28 - Non-concurrence with the contract review value
(a) When the Appraisal Services Manager does not concur with the contracted Fee Review
Appraiser’s suggested value, the Appraisal Services Manager shall:



Prepare a letter to the contracted Fee Review Appraiser advising of a non-concurrence. The
letter shall also state the reasons for the non-concurrence;
Place a copy of the letter in the Appraisal File;
Upon issuance of the non-concurrence letter to the contracted Fee Review Appraiser, initiate
action to secure an acceptable appraisal review from a different contract Fee Review
Appraiser or a qualified Real Estate Representative.
5.1.F.29 - Uneconomic remnant determination
(a) When the Delaware Department of Transportation requires only a portion of any given parcel of
land for a transportation project, the individual assigned the review of an appraisal report is
responsible for the final determination of whether or not the remaining parcel is to be classified as
an uneconomic remnant from an analysis of all information available.
(b) During the appraisal review process, the owner of the property shall be contacted and his or her
views considered when deciding the status and value of the remaining real property. However,
the ultimate test is whether the remaining parcel has utility or value to the present owner.
(c) According to Delaware law, uneconomic remaining parcels may only be acquired:



If the portion of the property outside the normal right-of-way is landlocked; or
If the portion of the property outside the normal right-of-way is so situated so as to give rise to
claims or to litigation concerning severance or other damages, the cost of the acquisition to
the State of Delaware of the remaining parcel plus the amount of damages (loss of value) to
the remaining property would be practically equivalent to the total value of the entire property;
and
The remaining parcel is of little or no value to the owner.
(d) If any part of the remaining parcel is determined to be an uneconomic remnant by the individual
conducting the appraisal review, DOCUMENT NO. A1, CERTIFICATE OF REVIEW AND
CONCLUSION OF FAIR MARKET VALUE-ACQUISITION shall so specifically state the
determination of just compensation for the uneconomic remaining parcel or DOCUMENT NO.
A14, CERTIFICATE OF REVIEW AND CONCLUSION OF FAIR MARKET VALUE-FEE
REVIEW APPRAISER shall recommend the need for a determination to be made of just
compensation for the uneconomic remaining parcel.
5.1.F.30 - Owner and tenant-owned improvements
(a) Any buildings, structures or other improvements which would be considered to be real property if
owned by the owner of the real property on which it is located, shall be considered to be real
property for purposes of appraisal and acquisition compensation.
(b) Just Compensation established for tenant-owned improvement is the amount, whereby the
building structure or other improvements contributes to the fair market value of the whole property
or its orderly liquidation value, whichever is greater.
(c) In order to determine the greater value to be offered to the owner of the tenant-owned
improvements, either the contributory value or orderly liquidation value of the tenant-owned
buildings, structures or other improvements shall be appraised from both of these aspects.
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(d) During the technical review, the individual conducting the review shall determine the greater
amount established and the reviewer shall place in the Appraisal File a signed and dated
statement setting forth an identification or listing of the buildings, structures, and other
improvements on the land as well as any fixtures which the individual conducting the appraisal
review considered to be a part of the real property to be acquired if such a listing differs from that
of the appraisal. The identification or listing shall also state the just compensation to be offered for
each respective tenant-owned improvement. The individual assigned to conduct the technical
review has the responsibility to ensure that the approved value has the appropriate allocation of
value between the fee and tenant owners.
5.1.F.31 - Appraiser and review appraiser performance evaluations
(a) The Appraisal Services Manager shall annually, or more frequently if appropriate, evaluate the
performance of each individual qualified by the Delaware Department of Transportation to
prepare appraisal reports and/or review appraisal reports assigned or contracted to provide
appraisal services during the previous year by utilizing DOCUMENT NO. A15, APPRAISER AND
REVIEW APPRAISER EVALUATION REPORT. A separate form shall be prepared for each type
of property appraised (commercial, residential, etc.).
(b) The Appraisal Services Manager and those Real Estate Representatives who make appraisal
report assignments shall together conduct an administrative review for the purpose of measuring
the performance of those individuals who have provided appraisal services during a defined
reporting period in order to determine if the Delaware Department of Transportation shall continue
to assign future appraisal services tasks to an individual.
(c) The Appraisal Services Manager shall maintain these evaluation reports in his or her office, as a
historic record of each individual’s performance.
(d) The Appraisal Services Manager shall inform the Assistant Director, Real Estate Services, in
writing of all cases where a Real Estate Representative’s, fee appraiser’s, or fee review
appraiser’s performance is determined to be unacceptable and shall:


In the case of a Real Estate Representative make recommendations for corrective actions
through counseling, training or discipline transfer; or
In cases where a fee appraiser’s or fee review appraiser‘s performance has been judged
deficient and not acceptable, the Appraisal Services Manager may recommend that the
appraiser or fee review appraiser services not be utilized.
5.1.G - Definitions
ABBREVIATED PARENT TRACT - An abbreviated parent tract is an appraisal application is something
less than the whole physical property. An abbreviated parent tract is typically an economic unit of land
supported through a highest and best use analysis wherein a portion of the ownership is concluded to
have a higher and better use than as an aggregate to the whole ownership.
ACCEPTABLE APPRAISAL - An appraisal which has been found by a qualified Review Appraiser to
meet applicable State and Federal standards, criteria, and regulations and complies with the Appraisal
Assignment Contract. Acceptable appraisals are acceptable for payment of the contracted fee if
submitted by a fee appraiser.
ADMINISTRATIVE REVIEW - Administrative review work is performed by clients and users of appraisal
services as a due diligence function. It is typically nonconcurrent with the technical review. The intent of
this function is to assist in making business decisions, evaluating appraisal reports for litigation purposes,
procedural compliance monitoring, quality control, quality assurances, and assessment of training needs.
A Certificate of Review is not required.
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AFTER VALUE - The market value estimate of the remaining rights in real property after the Department
acquires any interest(s) in that real property.
AGE-LIFE METHOD – See Economic Age-Life Method; Modified Economic Age-Life Method; Physical
Age-Life Method
APPRAISER - One who is trained and educated in the methods of estimating the value of property
through analysis of various factors which estimate said value.
APPRAISAL – A written report detailing the act or process of estimating the monetary value of an interest
in property. The appraisal is to be independent and impartial report and is prepared by a qualified
appraiser. It must set forth an opinion of defined value for an adequately described property. The value
will be assigned as of a specific date and will be supported by the presentation and analysis of relevant
market date. The term is also frequently used as a synonym for the written appraisal report.
APPROVED APPRAISAL - An acceptable appraisal that is approved by a qualified Review Appraiser
and used in support of the Review Appraiser’s conclusion of just compensation. All appraisals and
specialty reports, must be reviewed and approved by a Review Appraiser before negotiations for the
acquisition of the property can begin. Updated appraisals shall be amended or revised when new
information indicates a revision is necessary.
ASSESSMENT - The valuation of the property for taxation: also the value so assigned.
BEFORE VALUE - The market value estimate of the real property before the Department acquires any
interest(s) in that real property.
BREAKDOWN METHOD – A method of estimating accrued depreciation in which the total loss in
property value is estimated by analyzing and measuring each cause of depreciation separately.
CHATTEL - Personal property such as household goods or removable fixtures.
CLIENT - The Appraisal Services Manager and/or his/her designees.
COMPARABLE DATA BOOK - A data book to include sufficient sales and listing data to be used as
supporting information in the preparation of appraisals and or the waiver valuation.
CONSEQUENTIAL DAMAGES - Loss in value of a parcel, no portion of which is acquired, resulting from
a highway improvement.
CONTRACT - An agreement between two or more persons, upon a sufficient consideration, to do or not
to do a particular thing.
CONTRACT REVIEW APPRAISER - An appraiser, so qualified by the Delaware Department of
Transportation, who examines the report of other appraisers to determine whether their conclusions are
consistent with the data reported and with other generally known information.
CONTRIBUTORY VALUE - The dollar value that buildings, structures, or other improvements or items
deemed to be part of the real property contribute to or enhance the fair market value of the total property.
Contributory value may consist of:

The value in place of a building, structure, other improvement, the present use of which is the
highest and bet use of the land to be acquired, for its remaining economic life; or
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

The interim use value of a building, structure or other improvement, the present use of which is
not the projected highest and best use of the land to be acquired, for a specified interim time
period longer that the remaining term of the lease (interim use value includes the orderly
liquidation value of the buildings, structures or other improvements at the end of the time period);
or
The value in place of a building, structure, or other improvement, the present use of which is not
the highest and best use of the land to be acquired, for the remaining term of the lease plus the
worth of its orderly liquidation value at the end of the lease term.
COST APPROACH – A set of procedures in which an appraiser derives a value indication by estimating the
current cost to reproduce or replace the existing structure, deducting for all accrued depreciation in the real
property, and adding the land value.
COST NEW IN PLACE - This value is Reproduction or Replacement Value. The value will represent the
cost of new equipment of like kind, character and function. The cost is to be determined by direct quotes
from manufacturers or from standard published catalogues. To this cost is added freight, rigging, labor or
installation, additional attachments, electrical starters and switches, wiring, piping, valves, fittings,
foundations and other miscellaneous material necessary to make the equipment operative. When the
equipment is no longer manufactured or obsolete, the appraisal will be based on equal or improved
equipment of like kind and character and capable of performing the same function. It will be depreciated to
reflect the lessening of value due to obsolescence. For the purpose of the appraisal, Reproduction Value
and Replacement Value are synonymous.
DAMAGES -The loss in value to the remainder property in a partial acquisition of a property.
DEPRECIATED VALUE IN PLACE - This value will be the appraiser's carefully considered opinion as to
the value of the machinery and equipment as a whole integrated unit to the occupying owners as a going,
operating concern. In this valuation the appraiser is to consider age, wear and tear. He is also to consider
the elements of functional obsolescence which represents, in a measure, the changes in engineering,
design, new processes and methods, and improvements in the arts and sciences. Consideration is to be
given to the probability of replacing the machinery and equipment - as an integrated whole - with equipment
of like kind and character, in the same condition and function. This definition is synonymous with “Fair
Market Value in Place”.
ECONOMIC AGE-LIFE METHOD – A method of estimating accrued depreciation in which the ration of
effective age to total economic life is applied to the current cost of the improvements to obtain a lump-sum
deduction.
ECONOMIC LIFE - The estimated period over which it is anticipated that a property may be profitably
utilized. This period can never exceed the physical life of the property and most generally is short.
ECONOMIC RENT - The amount of rent that could be reasonably expected if the property were available
for rent. It is fair, proper, and reasonable rental which would result from informed, intelligent, and prudent
bargaining in the usual course of business.
ENCROACHMENT - A building, a part of a building, or obstruction, which intrudes upon or invades a
highway or sidewalk or trespasses upon the property of another.
ENCUMBRANCE - A claim, lien, charge, or liability attached to and binding upon real property, such as a
judgment, unpaid taxes, or a right-of-way; defined in law as any right to, or interest in, land which may
subsist in another to the diminution to its value, but consistent with the passing of the fee. Can be
synonymous with encumbrance.
FAIR MARKET VALUE - The sale price that a willing and informed seller and a willing and informed
buyer can agree to for a particular property.
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FAIR MARKET VALUE ESTIMATE (FMVE) - The Fair Market Value Estimate is the Delaware
Department of Transportation’s Review Appraiser’s determination of the value of the property to be
acquired and damage, if any, to the residue. The estimate determines the amount of the offer of just
compensation to be made to an owner of real property interests.
FIXTURE - A movable chattel (such as a machine, heating plant, etc.) which previously was personal
property, and which has been attached to land or a building in such a way and manner as to become a
part of the real property.
HIGHEST AND BEST USE - That legal use of land use of land, which will yield the highest present value.
INCOME CAPITALIZATION APPROACH – A set of procedures in which an appraiser derives a value
indication for income-producing property by converting anticipated benefits into a property value.
JUST COMPENSATION - The price the Delaware Department of Transportation must pay to acquire real
property. The price offered by the Delaware Department of Transportation is considered to be fair and
equitable to both the property owner and the public. The Delaware Department of Transportation’s offer
to the owner is “just compensation” and may not be less than the amount established in the approved
appraisal report as the fair market value for the property. If it becomes necessary for the Delaware
Department of Transportation to use the condemnation process, the amount paid through the court will be
just compensation for the acquisition of the property.
LARGER PARCEL - A tract or tracts of land which are under the beneficial control of a single individual
or entity and have the same, or an integrated, highest and best use. Elements for consideration in
making a determination are contiguity, or proximity, as it bears on the highest and best use of the
property, unity of ownership, and unity of highest and best use.
LEASE - A contract, written or oral, for the possession of lands and tenements, on the one hand, and a
recompense of rent or other income, on the other hand. It is a contract by which one person divests
himself or real property and another person takes possession thereof for a determinable and limited time,
though not necessarily a definite period of time.
LESSEE - One who acquires the right of use of the property of another. He is the one whom the lease is
granted or the property is rented under the lease. The lessee’s interest is known as a leasehold.
LESSOR - One who rents real property to another or who conveys or leases the right of use of real estate
to another. The lessor’s interest in known as the leased fee.
MARKET VALUE - The highest price for which property can be sold in the open market by a willing seller
and a willing purchaser, neither acting under compulsion, and both exercising reasonable judgment.
MODIFIED ECONOMIC AGE-LIFE METHOD - A method of estimating accrued depreciation in which the
ratio of effective age to total economic life is applied to the current cost of improvements after curable
physical and functional items are deducted.
NET INCOME - The difference between the effective gross income and the expenses, including taxes
and insurance. Usually the term is qualified as net income before depreciation.
NET LEASE - A lease under which the lessee assumes complete responsibility for the operation of a
property, including the obligation of operation expenses and all charges, including taxes, insurance,
replacement, and any special assessment.
NONCONFORMING USE - A use which was lawfully established and maintained but which, because of
the application of a zoning ordinance to it, no longer conforms to the use regulation of the zone in which it
is located.
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ORDERLY LIQUIDATION VALUE - Orderly liquidation value is defined as the probable sale price of an
item, if offered for sale on the condition that it will be removed from the property at the buyer’s expense,
allowing a reasonable period of time to find a person buying with knowledge of the use and purpose for
which it is adaptable and capable of being used, including separate use of serviceable components and
scrap when there is no reasonable prospect of sale except on that basis. Salvage value (or value for
removal) is considered synonymous with orderly liquidation value.
PERSONAL PROPERTY - In general, property that can be moved. It is not permanently attached to, or a
part of, the real property. Personal property is not to be considered in the appraisal of real property.
PHYSICAL AGE-LIFE METHOD – A method of estimating incurable physical deterioration based on
physical age-life; assumes that deterioration occurs at a constant, average annual rate over the estimated
life of the improvements. Calculated physical curable deterioration is deducted from current reproduction
cost less physical curable deterioration to produce a cost estimate that reflects physical deterioration.
PROXIMITY DAMAGES - Damage to a property arising as a consequence of the nearness or proximity of
a transportation project, to the improvements on the property. The diminution of the market value of a
property as a result of the encroachment and proximity of a transportation project.
QUALIFIED APPRAISER - A person who, by education, experience, ability, and license or certification
requirements is capable of preparing an appraisal or a particular piece of real estate.
QUALITY CONTROL PROGRAM - A written plan by which the section regulates its activities based on
compliance with Department policies and procedures to assure an acceptable level of products.
RECOMMENDED COMPENSATION - The amount established by the Delaware Department of
Transportation’s staff Review Appraiser, which typically represents full compensation, excluding business
damages, moving costs, and associated costs necessary to obtain title to the property interest(s) being
acquired.
REJECT APPRAISAL An appraisal report that is found to be flawed in theory, content, or concept and
does not provide a meaningful conclusion. Payment to fee appraiser for Rejected Appraisals is not
necessary. In the event that a Review Appraiser rejects and appraisal, a new appraisal is necessary.
REMAINING ECONOMIC LIFE - The period of time (years) from the date of appraisal to the date when
the improvements become valueless.
REPLACEMENT COST - The cost or replacement new, at current prices, of a property having the utility
equivalent to the one under appraisement.
REPRODUCTION COST - The cost of construction new of an exact duplicate or replica using the same
materials, construction standards, design, layout, and quality of workmanship.
REVERSION - The right to repossess and resume the full and sole use and proprietorship of real property
which temporarily has been alienated by lease, easement or otherwise. The reversion right becomes
effective at a stated time or under certain conditions such as the termination of a leasehold, etc.
according to the terms of the controlling instrument.
REVIEW APPRAISER - A person of the Delaware Department of Transportation’s appraisal and
appraisal review staff, so qualified by the Delaware Department of Transportation, who examines the
appraisal report of other appraisers to determine whether their conclusions are consistent with the data
reported and with other generally known information.
SALES COMPARISON APPROACH – A set of procedures in which an appraiser derives a value
indication by comparing the property being appraised to similar properties that have been sold recently,
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applying appropriate units of comparison, and making adjustments, based on the elements of
comparison, to the sale prices of the comparables.
SALVAGE VALUE - The probable sale price of an item, if offered for sale on the condition that is will be
removed from the property at the buyer’s expense, allowing a reasonable period of time to find a person
buying with knowledge of the uses and purposes for which it is adaptable and capable of being used,
including the separate use of serviceable components and scrap when there is not reasonable prospect
of sale except on that basis.
SCOPE OF WORK - A written set of expectations that form an agreement or understanding between the
appraiser and the Delaware Department of Transportation as to the specific requirements of the
appraisal, resulting in a report to be delivered to the Delaware Department of Transportation by the
appraiser.
SEVERANCE DAMAGES - Loss in value of the remainder of a parcel resulting from an acquisition.
TECHNICAL REVIEW - Work performed by an appraiser in accordance with Standard 3 of the Uniform
Standards of Professional Appraisal Practice (USPAP) for the purpose of forming an opinion as to
whether the analyses, opinions and conclusions in the appraisal report are appropriate, reasonable and
adequately supported.
UNECONOMIC REMNANT - The portion of an owner’s property that remains after the Delaware
Department of Transportation acquires the property needed for a transportation project whereby it has
been determined to have little or no value or utility to the owner. The Delaware Department of
Transportation must offer to purchase the Uneconomic Remnant, but the owner may refuse the offer.
WAIVER VALUATION - The valuation process used and the product produced when the Delaware
Department of Transportation determines that the preparation of a formal appraisal report is not required.
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Section 5.2
APPRAISAL STANDARDS
5.2.A - PURPOSE
To detail the Delaware Department of Transportation’s standards, requirements, and procedures for the
preparation of appraisal reports of real property needed for transportation related purposes and is
applicable to all appraisals regardless of the location, type, value or ownership of the property being
appraised. These standards, requirements, and procedures apply to Real Estate Services staff and
contracted real estate services providers.
5.2.B - AUTHORITY
12 U.S.C. 3301 et seq.
49 Code of Federal Regulations, Section 24.102
49 Code of Federal Regulations, Section 24.103
5.2.C - SCOPE
The principle users of this section are Real Estate Services staff involved in the appraisal and appraisal
review of real property, contracted real estate appraisers, contracted review appraisers, and Real Estate
Services management.
5.2.D - TRAINING
Training is not required.
5.2.E - DOCUMENTS
5.2.E.1 - Mandatory documents
(a) The documents listed below and inserted into this subsection is required to achieve a means to
uniformly document appraisal reports prepared for the Delaware Department of Transportation.
5.2.E.2 - Documents to be used relating to appraisal report preparation
(a) Document No. A4, Value Finding Report
(b) Document No. A16, Assumptions and Limiting Conditions
(c) Document No. A17, Certificate of Appraiser
5.2.F - GENERAL
5.2.F.1 - Compliance with USPAP
(a) Appraisal report preparation and appraisal report review standards are intended to be consistent
with the Uniform Standards of Professional Appraisal Practice (USPAP) and promulgated by
the Appraisal Standards Board of the Appraisal Foundation. It is recognized by the users of this
manual, that portions of this part of the manual may not be in compliance with USPAP and thus a
Jurisdictional Exception is invoked as noted in 5.2.F.6. Therefore, any individual providing
appraisal services for the Delaware Department of Transportation must comply with provisions
set forth in this part.
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5.2.F.2 - Ethical conduct
(a) The following applies when appraisal report preparation assignments are accepted by a fee
appraiser:


The contracted fee appraiser shall obtain written permission from the Appraisal Services
Manager before proposing on or accepting an appraisal assignment from another party on
property which may be closely related to a Delaware Department of Transportation project,
and on which the appraiser previously or currently has contracted with the Delaware
Department of Transportation to provide appraisal services;
Appraisers may accept assignments from owners or other parties, as well as from other
condemning agencies. However, acceptance of assignments from another party may be
unethical without prior written release from the Appraisal Services Manager for any property
in which the appraiser would use market data, trends, adjustments or other analyses which
were developed for a Delaware Department of Transportation contract assignment,
regardless of whether a fee was paid by the Delaware Department of Transportation.
5.2.F.3 - Co-signing
(a) Except for written review reports prepared for the Delaware Department of Transportation, it is
unacceptable for any person to co-sign the report, unless specifically permitted by contract terms
or prior written agreement from the Appraisal Services Manager.
(b) Significant assistance must be acknowledged by naming the contributor in the certification. The
appraiser and assistant are cautioned to observe the confidentiality requirements as stated in
5.2.F.5.
5.2.F.4 - Hypothetical conditions
(a) If the Department requires the use of a hypothetical condition to be considered for an
establishment of value, the Real Estate Representative assigning the appraisal report preparation
must furnish a written statement to the appraiser for inclusion in the appraisal report which must
specifically request the use of the hypothesis, and state that the hypothetical condition is required
for legal purposes, for purposes of reasonable analysis, or for purposes of comparison.
(b) In the appraisal report, the appraiser must clearly disclose the use of the hypothesis and
appropriately reference the Delaware Department of Transportation’s statement and include it in
the Assumptions and Limiting Conditions portion of the appraisal report and in the addenda. The
rationale for the assumption, the nature of the hypothetical condition, and its effect on the result of
the appraisal, review or consulting service, must be narratively described.
(c) If the appraiser assumes a hypothetical condition, not specifically requested by the Delaware
Department of Transportation, such as, an assumption of design change, pending unsupported
land use, etc. The appraiser must state in the report and adequately support an estimate of the
real property’s “as is market value” prior to or aside from the hypothetical condition.
5.2.F.5 - Confidentiality
(a) The appraiser must obtain written permission from the Appraisal Services Manager prior to
submitting any information to a third party about a parcel of land whereby the appraiser has
accepted the preparation of an appraisal report assignment from the Delaware Department of
Transportation unless the parcel information has become public knowledge. Appraisers are
cautioned that release of information to a professional organization’s admissions review
committee may be a breach of confidentiality if any litigation is pending. Confidentiality applies to
a technical review of an appraisal report as well as the preparation of an appraisal report.
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5.2.F.6 - Jurisdictional exception
(a) For the purpose of acquisition of real property by the Delaware Department of Transportation, all
appraisal reports shall comply with 5.2.F.6 through 5.2.F.15.
(b) For the purpose of this section, increase or decrease to value caused by an update of an
appraisal report or due to project influence is related to knowledge of the project location in the
market and or public notification of the project. Since the appraised value is date specific, any
influence as of or after the date of public notification of the project is to be ignored. This applies to
any parcel directly or indirectly impacted by the project, i.e. increases or decreases in the market
due to knowledge of the project. The Appraisal Services Manager shall be responsible for
determining the date of public notification and shall supply this information to those Real Estate
Representatives authorized to assign preparation of appraisal reports for their use in
dissemination to staff and fee appraisers.
(c) To the extent that this section may differ from USPAP requirements, such differences shall be
considered a Jurisdictional Exception. Instructions given by the assigning Real Estate
Representative, which may lead the appraiser to conclude that a jurisdictional exception applies,
will be considered on a case-by-case basis, such as instructions based on case law.
5.2.F.7 - Property owner contact
(a) The property owner or his or her designated representative shall be contacted by the appraiser
and afforded an opportunity to accompany the appraiser during the appraiser’s inspection of the
property. If there is an absentee owner, a reasonable effort shall be made by the appraiser to
contact him or her. If the effort to contact an owner, whether the owner is an occupant of the
property, the landlord, or an absentee owner is unsuccessful, the appraiser must notify the Real
Estate Representative who he or she received his or her assignment from and must notify him or
her of the situation and request additional contact information, if any. Efforts by the appraiser to
contact owner are to be by both telephone contact and by a letter sent by registered mail with a
return receipt requested. Owner contact is exempt when utilizing the waiver valuation process for
establishing value.
5.2.F.8 - Appraisal report standards
(a) All appraisal reports prepared for the Delaware Department of Transportation shall be typewritten
documents, submitted in triplicate, and must be dated, signed and certified by the individual
assigned to prepare the appraisal report.
(b) All properties, or interests therein shall be appraised for the purpose of determining market value
in accordance with all applicable Federal and State statutes.
(c) Any increase or decrease in market value of the property prior to the date of valuation caused by
the transportation or related improvement for which the property is to be acquired, or by the
likelihood that the property would be acquired for such improvement, other than that due to
physical deterioration within reasonable control of the owner, shall be disregarded in determining
compensation for the property.
(d) No consideration shall be given to any relocation assistance benefits to which a property owner or
his or her tenant may be entitled.
(e) No consideration shall be included for the value of an ongoing business located at and upon the
real property to be acquired by the Delaware Department of Transportation.
(f) While no specific methods, procedures, or techniques are outlined in this manual for the solution
of appraisal problems, all appraisal reports shall be prepared in accordance with the standards
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prescribed by leading national appraisal organizations. They should be sufficiently
comprehensive so that one who is not familiar with the property can form a mental image of the
property and the surrounding community and be led by the use of applicable supporting data and
the logic of the appraiser’s reasoning to the same conclusions as to value as he or she who
prepared the report.
(g) When detailed explanation is required by this manual, it must contain the appraiser’s reasoning
for various elements of adjustment and must be in sufficient detail and with sufficient clarity to
allow an individual assigned to review the appraisal report to make sound judgment of the validity
and acceptability of that adjustment. If information required cannot be obtained, the appraiser
shall so state.
(h) At a minimum all appraisal reports shall meet the following requirements:



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The appraisal must meet the Delaware Department of Transportation’s definition of an
appraisal;
Shall include a statement that the real property owner was afforded the opportunity to
accompany the appraiser during his or her inspection of the property;
The appraiser shall perform an inspection of the subject real property to be appraised. The
inspection should be appropriate for the appraisal problem;
Shall include a description of the neighborhood and proposed project area;
Shall include a description of the physical characteristics of the property being appraised;
Shall include a description of the real property right(s) to be acquired, e.g. fee simple,
easement, etc;
Shall state the value being appraised (usually fair market value), and its definition;
Shall include the date of the appraisal report and the date of valuation;
Shall include a realty/personalty report, when applicable;
Shall describe and analyze known and/or observed encumbrances, if any;
Shall include title information including a five-year sales history of the subject real property;
Shall include a statement as to the zoning of the parcel being appraised;
Shall include a description of the real property’s present use;
Shall include a statement of the real property’s highest and best use. If the highest and best
use is in question or is different from the existing use, provide an appropriate analysis
identifying the market-based highest and best use;
Shall include relevant market information and an analyzes of the relevant market information;
The appraiser shall state his or her analysis, opinions, and conclusions in the appraisal
report;
Shall include a sketch of the property, and if applicable, include the location and dimensions
of any improvements;
Shall include adequate photographs of the subject and comparable data with the name of the
photographer and the date taken;
Include a locational map depicting the subject real property and comparable data.
(i) The Delaware Department of Transportation will allow, in the case of single-family residential
appraisal, the use of the old “Uniform Residential Appraisal Report.”
(j) The Delaware Department of Transportation will allow, in the case of strip type acquisitions where
the primary improvements, if any, are not impacted and the highest and best use is not changed,
the use of DOCUMENT NO. A4, VALUE FINDING REPORT is acceptable.
(k) When an appraiser has a number of appraisal assignments on one project that are similar in
nature, the Appraisal Services Manager may allow the use of a general information and
comparable data book to alleviate the appraiser of unnecessary repetitive writing in report
preparation.
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(l) When appraising a property where buildings, structures, or other improvements located on the
real property are owned by persons other than the land owner and these improvements are
deemed to be part of the real property, the market value of such shall be determined by the
greater of either its contributory value to the real property to be acquired or by market value of
such improvements for removal from the real property; i.e. orderly liquidation value.
(m) The appraiser shall confirm the ownership of all improvements (buildings, fixtures, equipment,
signs, etc.) and complete an itemization of such improvements to be included in the appraisal
report. When tenant owned improvements are discovered to exist, the itemization shall
distinguish between those items of the fee owner versus those of the tenant. Usually the
presence of tenant owned improvements result from a written lease agreement. If a copy of the
agreement can be obtained, it is to be included in the appraisal report. A separate listing of all
tenant-owned buildings, structures, improvements or items determined to be real property shall
be submitted in the appraisal showing both the contributory value and the orderly liquidation value
and the tenant-owner of each.
(n) The values of individual items evaluated in a specialty report shall not be arbitrarily added to the
valuation of realty, but included to the extent of their contribution to the value of the whole
property.
(o) The appraiser is to immediately notify the assigning Real Estate Representative of any unusual
circumstances surrounding the real property, such as title issues, areas, or uses, discovered in
the course of preparing the appraisal report that may affect the future negotiations for the real
property being appraised and other appraisal reports being prepared for the Delaware
Department of Transportation.
5.2.F.9 - Tenant owned improvements
(a) The appraiser must establish a value of all buildings, structures, or other improvements,
including those owned by tenants, as part of the real property being valued.
(b) Buildings, structures or other improvements owned by tenants must be appraised as part of
the real property based on their contributory value, as if they could remain in place, and their
orderly liquidation value, in order to determine the greater value of the two. Lease terms
allowing or requiring the tenant to remove buildings, structures, or other improvements shall
be disregarded; they should be appraised as if they could remain through their usual life as
extended by normal maintenance.
(c) Agricultural crops are to be considered part of the realty whether the crops were planted by
the landowner or a tenant. Crops considered as realty shall be appraised for value estimates
of their contributory value and, if owned by a tenant, their orderly liquidation value. If a
circumstance suggests anything whereby the crops are not to be considered as part of the
real property, a determination shall be made, legal opinion rendered as necessary, and
instructions provided to the appraiser as early as possible in the appraisal process. Where
questions exist, written legal advice should be obtained prior to the appraisal assignment.
(d) If agricultural crops are considered to be a part of the real property and landowner-owned,
then treatment is handled in accordance with standard acquisition policies and procedures,
i.e. an appraisal considering the market value of the property as improved in accordance with
its highest and best use. The value of crop, if any, should be reflected as harvested at current
commodity value as per the Department of Agriculture. The increment of value, if any, would
be reflected in the fair market value of the property acquired, without further distinction,
separation or allocation of the crop’s individual value.
(e) If agricultural crops are considered to be a part of the real property and tenant-owned, then
the crop shall be valued to determine the crop’s contributory value and its orderly liquidation
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value, the greater of which shall be offered to the tenant for the loss of the crop, building,
structure, or other improvement.
(f) If any item is determined to be personalty, i.e. personal property, and owned, by either the
land (fee) owner or a tenant owner, the item, for example, motor vehicles, household goods,
crops, etc., would not be appraised or eligible for acquisition. They would, however, be
possibly eligible under the State’s Relocation Assistance Program to be moved or payment
made for actual direct loss of tangible personal property.
(g) Appraisal report preparation requirements of the Federal Uniform Relocation Assistance and
Real Property Acquisition Policies Act of 1970 and Title 29, Chapter 95, Delaware Code
requires the separation of the tenant’s interest in the appraisal. These statutes do not require
a separation of the tenant’s leasehold interest.
(h) The appraiser must separately state the value of the property taken and damages, i.e., loss in
value to the remaining property. Tenant’s just compensation for tenant-owned buildings,
structures, or other improvements acquired and for damages, if any, to remaining tenantowned buildings, structures or other improvements shall be separately stated.
5.2.F.10 - Non-compensable items
(a) All appraisals will be made in accordance with Delaware law governing compensability, benefit
and value elements. The following are damage items which are considered to be noncompensable under Delaware law:
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Circuity of travel;
Loss of business;
Temporary diversion or rerouting of traffic;
Business loss during construction;
Traffic volume increase or decrease;
Enforcement of police power in regulating traffic;
Access impairment or temporary denial during construction;
Diversion of traffic;
Personal property as opposed to fixtures.
5.2.F.11 - Comparable sales data book
(a) Under certain circumstances and with concurrence from the Appraisal Services Manager, the
Real Estate Representative assigning the preparation of appraisal reports can request a
Comparable Sales Data Book from a licensed Real Estate Appraiser.
(b) This book shall be consolidated sales and listing information in one formatted report to be used
for the preparation of appraisal reports and waiver valuation assignments by qualified Real Estate
Representatives and management. Sufficient sales and listing data shall be included which would
be considered in the normal course of business for an appraiser to evaluate the value of an
individual parcel of land. In all cases the data book shall include sales or listings of every property
type impacted by the specific project or as identified by the assigning Real Estate Representative
in the scope of work for the assignment. The type of data included for the comparable sales or
listing shall be similar to those listed in 5.2.F.12(o).
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5.2.F.12 - Narrative appraisal report
(a) In preparing a narrative report, the appraiser is permitted some latitude in format so that the
report can be tailored to a particular appraisal problem. The appraisal report shall however, follow
the general format and shall contain, at a minimum, the applicable requirements outlined below in
5.2.F.12(b) through 5.2.F.12(x).
(b) A title page displaying:
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Identification of the property;
Name of owner(s);
Location of property;
Delaware Department of Transportation project number;
Federal-aid project number, when applicable;
Delaware Department of Transportation project parcel number; or
The county tax assessment number where the property is situated. However, this number
shall only be used when a Delaware Department of Transportation project number is
unavailable.
(c) A letter of transmittal containing:
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Date of the letter of transmittal;
Identification of the property;
Name of owner(s);
Location of property;
Delaware Department of Transportation project number;
Federal-aid project number, when applicable;
Delaware Department of Transportation project parcel number; or
The county tax assessment number where the property is situated. However this number
shall only be used when a Delaware Department of Transportation project number is
unavailable;
Interest in the property being appraised;
Statement that an inspection of the property, required owner contact, and necessary
investigation and analyses were made by the appraiser;
Date as of which the market value is estimated;
The estimate of market value for the acquisition with reasonable allocation of such
compensation to property (land and improvements) to be acquired and to any damage and/or
benefit to the remainder.
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(d) A Table of Contents outlining all the major elements applicable to the appraisal problem.
(e) Description of the property:
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The purpose of the appraisal report shall be stated, including a definition of market value
and the rights or interests being appraised;
Scope of work consistent with the provisions set forth in 5.1.F.4(e) through 5.1.F.4(j).
A property history that shall delineate title for the previous five years shall be given showing
the parties of any transactions, date of any transactions, deed records, date of transfers,
consideration paid for each transfer.
(f) Assessment and taxes:
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The assessed value of the property being appraised for each jurisdiction in which the
property exists and the taxes assessed for the applicable fiscal year shall be stated.
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(g) Owner contact:
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The appraisal report must indicate the date on which the property was inspected and the
name of the person accompanying the appraiser during the inspection. If the property owner
or his or her designated representative declines the offer to accompany the appraiser, the
appraisal report must so indicate, along with the name of the person to whom the opportunity
was given. If there is an absentee owner, a reasonable effort shall be made to contact him or
her. If the effort to contact a resident or absentee owner is unsuccessful, the appraisal report
must describe what effort was made;
In the event a lessee or contract purchaser occupies the property being appraised, it is the
appraiser’s responsibility to determine the name of the occupant and the terms of his or her
occupancy. If the contract to purchase or lease agreement does not include the whole
property appraisal, it will be necessary to specify the property rights associated with each
portion of the divided property.
(h) Area and neighborhood analysis:
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The area and neighborhood shall be described and all applicable factors which may affect
value, such as population growth, economic status, employment, transportation, etc., shall be
set forth and analyzed as to their affect on the property being valued.
(i) Description of the site:
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An adequate description shall be given of the parcel being valued, its area, shape,
accessibility, contiguity of parcels, adjacent property uses, etc., with reference to an attached
property plot.
(j) Description of improvements:
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An identification and description of the buildings, structures, or other improvements situated
upon the land as well as the fixtures which the appraiser considered to be a part of the real
property to be acquired, shall be given, including the condition, effective age, remaining
economic life, and any other points or items that may add or detract from the value of the real
property. All items which are not included in the appraisal but could be reasonably considered
fixtures shall be listed with a notation that they are excluded;
In the case when an appraisal report is being prepared where personal property is impacted
by the acquisition, the appraiser shall coordinate with Real Estate Services personnel
involved with providing relocation assistance and the Real Estate Representative who
assigned the report preparation, an inclusion in the report of an inventory list of personal
property situated upon the property being valued. The Real Estate Representative who
assigned the report preparation shall provide assistance in identifying this requirement
through the scope of work;
If a formal building inspection report was prepared, it should be incorporated into the real
estate appraisal here.
(k) Present use:
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The present use or uses of the real property shall be described and, if more that one use, the
portions of the property allocated to each use shall be defined.
(l) Zoning:
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The present zoning, the jurisdiction under which the property is zoned, and a general
description of the uses and limits of the type of zoning shall be stated.
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(m) Highest and best use:
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A statement shall be made setting forth the highest and best use of the real property. If the
appraiser’s opinion of highest and best use does not correspond with either the present
and/or obvious highest and best use, appropriate evidence shall be included to substantiate
his or her opinion.
(n) An analysis before the taking utilizing the three conventional approaches to value, i.e. Sales
Comparison Approach, Cost Approach, Income Capitalization Approach is to be considered in
estimating market value and included in the appraisal report. If any of these approaches is not
considered, an explanation of why it is not being considered shall be included.
(o) When doing an analysis of the Sales Comparison Approach, a representative sampling of three
(3) or more sales is required with each application of the sales comparison approach to value.
When ample market data is available, at least five (5) sales are desirable for market analysis. In
the event of a limited market and three (3) recent sales are not available, the fact shall be noted
in the report. Sales must be chosen that will be similar to the property being appraised with
respect to the date of sale, location, use, improvements, etc. and which will require the least
amount of adjustment. Each sale directly related to the subject property being valued shall be
reported in detail and contain the following information:
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Date of Sale (Contracted and Recorded);
Deed Record;
Names of the parties to the transaction (Grantor/Grantee – Grantee/Lessee);
Location;
Consideration paid and with whom verified;
Motivation of parties;
A financing statement to the effect that the financing of the sale did not affect its validity as a
market value indicator is acceptable. If, however, the validity of the sale is affected by the
financing, then an explanation is required of the effects of the financing on the sale to include
information as to the source of financing, type of financing, amount of the financing and from
whom this information was verified;
Zoning;
Present use;
Highest and best use – If not developed in accordance with that use, the appraiser shall
estimate the highest and best use and state his of her reasons for that opinion;
Date on which the sale was inspected by the appraiser;
A brief description of the comparable property which shall include a copy of the tax map or
sketch;
Photographs of the comparable property (even when the property is vacant land) and the
improvements erected thereon, if any, noting the date and by whom taken;
When applicable, inclusion of a descriptive analysis of the sale detailing a brief history of the
sale, a description of improvements and their dimensions, effective ages, and conditions and
general components, e.g. the location of the sale in relation to shopping and work areas,
encumbrances, availability to utilities, soil conditions, wetland/floodplain areas, resource
protection areas, traffic counts, unusual features of the sale, etc;
An explanation as to an adjustment of the sale shall be included setting forth the appraiser’s
analysis and reasoning for the adjustments of each sale. If there is a substantial value
difference between a comparable sale and the subject property, a detailed explanation is
required for each significant element of dissimilarity affecting value;
A map of the general area shall be included in the appraisal report identifying the location of
the subject property and each of comparable property used.
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(p) An analysis of the Cost Approach may be considered and included in the appraisal report when
the property is developed to its highest and best use and the improvements have significant
remaining economic life. It shall also be used when appraising special purpose properties where
another approach is not applicable. Included in the analysis shall be the estimate of land value
developed from the market and prepared in accordance with 5.2.F.12(o). A detailed description of
the land improvements, i.e. driveways, parking lots, shrubbery, etc., and the structural
improvements, with a sketch showing their dimensions, is required whenever this approach is
used and shall include the following information:
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Identification of the source from which building and major costs were obtained. These
sources include but are not limited to, contractor’s estimates, cost data services, cost
extractions from market, etc. When utilizing a cost data service, the name of the service,
section, page number, and effective date shall be referenced. If the cost estimate is obtained
through electronic sources, sufficient information to identify the source, effective date and
calculations shall be included.
Identification trade fixtures and equipment considered to be real property must be separately
identified and their contributory value itemized. Such items may require a specialist’s
estimate.
Supported entrepreneurial profit or loss estimates. Entrepreneurial profit or loss is the
difference between the cost of development, including builder’s profit, and the value of a
property after completion. For Delaware Department of Transportation purposes, adequate
support is the reporting of the difference between the sale price of a newly constructed
property and the sum of the cost new of the improvements, inclusive of builder’s profit but
exclusive of entrepreneurial profit, and current land value, for each sale studied. Statements
of opinions or expectations of profit or loss unsupported by sales evidence are unacceptable.
Entrepreneurial profit or loss must be considered when performing the cost approach.
Each type of depreciation considered shall be shown separately, explained in detail, and
appropriately supported. Types of depreciation are physical deterioration curable, physical
deterioration incurable, functional obsolescence curable, functional obsolescence incurable,
and external obsolescence. Each of the five elements, or their omission, must be addressed
in the report and shown in the calculation. A zero amount must be shown for any element that
does not contribute to total accrued depreciation. The breakdown method is acceptable. The
age-life method of estimating depreciation is acceptable only for minor buildings and
structures.
(q) An analysis of the Income Capitalization Approach may be considered and included in the
appraisal report in which the income capitalization approach is used and in which case it will be
necessary to support this approach with the following information:
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The actual rent and with whom it was verified. This income must be attributable to the real
property and not to the owner, manager, or the business operating on the subject property;
The economic rent supported by the following evidence for each of a minimum of three (3)
rentals along with the date, terms and parties of each lease;
Location, description and condition of the site and improvements, area of the site, and the
equipment and services furnished;
Who provides various items of maintenance;
Photographs of the leased property showing all pertinent improvements;
Estimation of vacancy and collection losses with an explanation to substantiate that estimate;
An expense statement and its source;
A reconstructed operating statement with each expense explained and supported;
A Capitalization Rate regardless of the type of capitalization, each factor used to determine
the capitalization rate, such as rate of recapture, interest rates, mortgage ratios, etc., must be
fully substantiated.
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(r) Correlation of values:
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The appraiser shall restate the indicated values arrived at by the approaches used, discuss
the reliability and relative weight given each, and state his or her conclusions as to the market
value of the property.
(s) Description of the area of acquisition:
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A description of the land and all improvements being acquired, giving the area, dimensions,
the contribution of the take to the total property, etc.
(t) An analysis of the remainder, when applicable for determining the value of the remainder is the
same as those described in 5.2.F.12(n) through 5.2.F.12(r). Several additional considerations
which pertain to valuing the remainder are as follows:
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An adequate description shall be given of the site, as it will remain as a result of the
acquisition, indicating its area, shape, accessibility, etc. Any remaining structures are to be
listed and any structures which are considered by the appraiser to have been cured shall be
described;
A statement shall be made setting forth the appraiser’s opinion of the highest and best use of
the property after the acquisition. If that use is not the same as the highest and best use of
the property before the acquisition, a statement shall be made, with appropriate evidence,
substantiating that opinion;
When the Sales Comparison Approach was used to arrive at the before value and if there are
major changes in the residual property, the appraiser should finds sales that have factors of
comparability, even though they may be somewhat remote. The appraiser should also
consider comparable properties that have sold in the market from which there have been
similar takings for comparable purposes. In considering damages and in the absence of legal
basis of adequate market sales of remainder type properties, it is better for the appraiser to
consider, use and make adjustments of sale of remote comparability (for support of his or her
after value) rather than to disregard this approach. If the appraiser is unable to document his
or her opinion of damages to the residue from the market or by research studies, he or she
shall so state and give his or her reasoning for his or her value estimate and conclusions;
When the cost approach was used to arrive at the before value, it may be applicable in the
after value, assuming that all or a portion of the improvements remain. If such is the case,
the replacement cost new of the remaining improvements will remain the same and it will be
necessary to reconsider only the accrued depreciation for any functional or economic
obsolescence as a result of the acquisition and to reevaluate the land value;
In many cases the after value may be justified by the income capitalization approach. This
will probably require a new estimate of economic rent, another reconstructed operating
statement, and a different capitalization rate;
If the remainder would not be marketable due to damages that would be feasible to cure, a
description of how the problem could be cured and an estimate of its cost shall be set forth
and substantiated.
(u) The appraiser shall correlate as to the market value of the remainder by restating the indicated
values arrived at by the approaches used, discuss the reliability and relative weight given each,
and state his or her conclusions as it relates to the remainder.
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(v) Conclusions:
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When applicable, a Recapitulation of Value shall be included in the appraisal report. The
values of the property before the acquisition and of the remainder after the acquisition shall
be restated and the after value subtracted from the before value to determine the estimate of
compensation for the taking. The estimate of compensation shall be allocated to indicate the
value of the taking and that which is attributable to damages and/or benefits to the remainder;
DOCUMENT NO. A16, ASSUMPTIONS AND LIMITING CONDITIONS detailing the
appropriate assumptions and limiting conditions shall be included in the appraisal report;
DOCUMENT NO. A17, CERTIFICATE OF APPRAISER shall be included in the appraisal
report.
(w) An Addendum that shall contain:
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Identified photographs of the subject property, noting the date and by whom taken for the
purpose of identifying all principle above ground improvements, unusual features affecting
the value of the property to be acquired or damaged and, if a partial acquisition, the area to
be acquired. The identification need only be sufficient to allow a person reading the report to
ascertain what the photograph represents;
A copy of a plot or sketch of the property being valued shall be included showing the area
and dimensions of the total property, the location of improvements, and significant physical
features, the area of the taking and its proximity to the improvements, and the area of the
remainder. If there is more than one parcel, the plot or sketch or a separate sketch drawn for
that purpose, shall show the relative locations of the individual parcels. For the purpose of
clarity, a separate sketch may be included showing the remaining lands and the remaining
improvements and their proximity to the proposed public improvement for which the portion of
the property is being acquired. Unless there is a significant discrepancy with the appraiser’s
findings, the areas given on any Department of Transportation plans or Land Inventory Plot
provided by the assigning Real Estate Representative shall be used;
Other additional material (maps, charts, plans, photographs, etc.) that will assist the reader in
understanding the appraisal problem.
(x) An original and two (2) copies of the appraisal report shall be submitted to the assigning Real
Estate Representative.
5.2.F.13 - Specialty reports
(a) This section of the manual details the Delaware Department of Transportation’s standards and
requirements for the preparation of specialty reports for which an item or items situated upon the
property being valued needs to have a value established for transportation and related purposes
and is applicable to all specialty reports prepared regardless of the location, type, value or
ownership of the property being appraised. It is important that the specialty report reflect the three
(3) approaches to value when applicable.
(b) In preparing the specialty report, the person preparing the report is permitted some latitude in
format so that the report can be tailored to the specialty item problem. The report shall however,
follow the general format and shall contain, at a minimum, the applicable requirements outlined
below.
(c) A title page displaying:
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Identification of the property;
Name of owner(s);
Location of property;
Delaware Department of Transportation project number;
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Federal-aid project number, when applicable;
Delaware Department of Transportation project parcel number; or
The county tax assessment number where the property is situated. However this number
shall only be used when a Delaware Department of Transportation project number is
unavailable.
(d) A letter of transmittal containing:
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Date of the letter of transmittal;
Identification of the property (real or personal) being valued;
Location of property;
Statement that an inspection of the property (real or personal) and the necessary
investigation and analysis were made by the appraiser;
Date as of which the applicable value is estimated;
Signature of the individual who prepared the specialty report.
(e) The purpose of the specialty report shall be stated including scope of work consistent with
5.1.F.4(e) and a definition of the applicable values being appraised as stated below:
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Cost of Equipment New;
Depreciated Value in Place (Market Value in Place);
Orderly Liquidation Value of Equipment (Market Value for Removal);
Fair Market Value In Place;
Other items which may need to be valued by a specialty report.
(f) The person preparing the report shall describe each item or a group of items in such a manner
that it will prove understandable to the average reader of the report. The description shall include
(when applicable):
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Name of item and its function;
Manufacture’s name;
Model, type and/or catalog number;
Size and capacity;
Serial number;
Included attachments and accessories;
Type of drive;
Controls;
Identified photographs including the date taken and by whom.
(g) Specialty reports shall state the estimate of value and contain all the information that is essential
to explain, substantiate, and thereby document the estimate of value contained therein.
(h) When applicable, a specialty report shall contain a certification statement signed by the person
preparing the report as required by this manual or by any organization that requires a certification
statement in preparing the type of specialty report requested.
(i) When a specialty report is prepared as a result of the necessity of having a formal building
inspection done. The report shall be prepared an individual licensed (when applicable) by the
State of Delaware’s Division of Professional Regulation to prepare building inspection reports.
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5.2.F.14 - Form reports
(a) A Summary Report can be prepared by both qualified Real Estate Representatives and
contracted Fee Appraisers, and are intended to alleviate the appraisal staff from unnecessary
writing in the preparation of reports on relatively uncomplicated appraisal problems. Qualified
Real Estate Representatives and contracted Fee Appraisers are expected to utilize the Summary
Report format for all assignments, except when the constraints of the format prevent an adequate
analysis of the appraisal problem. Upon completion, on original and two (2) copies of the
appraisal report shall be submitted to the assigning Real Estate Representative. A Summary
Report shall be prepared in accordance with the applicable standards set forth in 5.2.F.8 and
contain as minimum requirements the following information:
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Parcel identification;
The date the estimated value was established;
The estimate of value for the acquisition with a reasonable allocation of such value to land
and improvements to be acquired and damages, if any, and benefits, if any, to the remainder.
(b) An appraisal report can be prepared utilizing a Fannie Mae Form report or any other form
acceptable to the Delaware Department of Transportation and shall be included on the form or by
attachment the following information:
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Identification of the property;
Name of owner(s);
Delaware Department of Transportation project number;
Federal-aid project number, when applicable;
Delaware Department of Transportation project parcel number; or
The county tax assessment number where the property is situated. However this number
shall only be used when a Delaware Department of Transportation project number is
unavailable;
Scope of work consistent with the requirements set fort in 5.1.F.4;
An adequate description of the neighborhood, the property, the portion of the property or
interest therein being acquired, and the remainder, if any;
A five-year history of the property’s title;
Effective date of valuation;
Identified photographs of the subject property, noting the date and by whom taken, showing
all principle above ground improvements, unusual features affecting the value of the property
to be acquired or damages, and, if a partial acquisition, the area to be acquired;
An identification or listing of the buildings, structures, and other improvements on the land as
well as the fixtures which the appraiser considers to be a part of the real property to be
acquired;
A sketch of the property showing its dimensions, location of improvements, significant
physical features, and areas of acquisition and remainder;
The data and analyses to explain substantiate and thereby document the estimate of value,
using all applicable approaches to value;
DOCUMENT NO. A16, ASSUMPTIONS AND LIMITING CONDITIONS detailing the
appropriate assumptions and limiting conditions shall be included in the appraisal report;
DOCUMENT NO. A17, CERTIFICATE OF APPRAISER shall be included in the appraisal
report;
Other descriptive materials (maps, charts, plans, photographs, etc.) that will assist the reader
in understanding the appraisal problem.
(c) An appraisal report can be prepared by qualified Real Estate Representatives or contracted Fee
Appraisers utilizing DOCUMENT NO. A4, VALUE FINDING REPORT. Value Finding Reports are
intended as an administrative shortcut with its application based on minimal value acquisitions
where the highest and best use is considered the same or similar both before the acquisition and
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after the acquisition. More emphasis is placed on describing the acquisition and impacts since the
owner(s) and user having knowledge of the subject parcel(s) and the surrounding neighborhood
characteristics. Information pertaining to the subject is simply stated rather than a more detailed
explanation as found in other reporting formats. This reporting format is intended to alleviate the
appraisal staff from unnecessary writing in the preparation of reports on relatively uncomplicated
appraisal problems. Staff and fee appraisers are expected to utilize the Value Finding Report
format for all low value and uncomplicated assignments, except when the constraints of the
format prevent an adequate analysis of the appraisal problem. DOCUMENT NO. A4, VALUE
FINDING REPORT, by its nature, has limited information; but is designed to contain sufficient
information to satisfy the Scope of Work minimum requirements set fort in 5.1.F.4. The following
information shall be stated or contained in the report and or attached as addenda:
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Identification of the property;
Name of owner(s);
Owner(s) mailing address;
Delaware Department of Transportation project number;
Federal-aid project number, when applicable;
Delaware Department of Transportation project parcel number; or
The county tax assessment number where the property is situated. However this number
shall only be used when a Delaware Department of Transportation project number is
unavailable;
Scope of work consistent with the requirements set fort in 5.1.F.4;
An adequate description of the real property, the portion of the real property or interest
therein being acquired, and the remainder, if any;
Legal description with a five-year history of the property’s title;
Scope of the project;
Effective date of valuation;
Land area to be acquired;
Current use of property;
Zoning;
Highest and best use;
Description of the land and improvements to be acquired. This is to include a statement that if
the valuation is for a only a portion of the property, that the remaining portion’s value is
unaffected by the acquisition;
Owner contact;
Value of the land and any improvements to be acquired with a basis for the valuation;
Summary of the recommendation of value;
Other descriptive materials (maps, charts, plans, photographs, etc.) that will assist the reader
in understanding the appraisal problem;
Identified photographs of the subject property, noting the date and by whom taken, showing
all principle above ground improvements, unusual features affecting the value of the property
to be acquired or damages, and, if a partial acquisition, the area to be acquired;
An identification or listing of the buildings, structures, and other improvements on the land as
well as the fixtures which the appraiser considers to be a part of the real property to be
acquired;
A sketch of the property showing its dimensions, location of improvements, significant
physical features, and areas of acquisition and remainder;
The data and analyses to explain substantiate and thereby document the estimate of value,
using all applicable approaches to value;
DOCUMENT NO. A16, ASSUMPTIONS AND LIMITING CONDITIONS detailing the
appropriate assumptions and limiting conditions shall be included in the appraisal report;
DOCUMENT NO. A17, CERTIFICATE OF APPRAISER shall be included in the appraisal
report.
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5.2.F.15 - Appraisal report updates
(a) Updates of an appraisal report prepared for the Delaware Department of Transportation are
acceptable in the format of a letter or an abbreviated Narrative Report. The use of a letter update
is not consistent with the Uniform Standards of Professional Appraisal Practice (USPAP)
standards which does not recognize appraisal updates, but rather indicates the assignment is a
new appraisal, therefore, the updating of an appraisal report is a Jurisdictional Exception as
described in 5.2.F.6.
(b) Updates indicating no change in value or a change in value which was based on the application
of an essentially mathematical extension should be done by letter incorporating the updated
report by reference. The following information shall be included as part of the update:
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Identification of the property;
Name of owner(s);
Owner(s) mailing address;
Delaware Department of Transportation project number;
Federal-aid project number, when applicable;
Delaware Department of Transportation project parcel number; or
The county tax assessment number where the property is situated. However this number
shall only be used when a Delaware Department of Transportation project number is
unavailable;
Any change in the title of the property;
Effective date of original valuation;
Effective date of updated valuation;
Land area to be acquired;
Description of the land and improvements to be acquired. This is to include a statement of
damages to the remaining portion of the property;
Value of the land and any improvements to be acquired with a basis for the valuation;
Other descriptive materials (maps, charts, plans, photographs, etc.) that will assist the reader
in understanding the appraisal problem;
Updated identified photographs of the subject property, noting the date and by whom taken,
showing all principle above ground improvements, unusual features affecting the value of the
property to be acquired or damages, and, if a partial acquisition, the area to be acquired;
DOCUMENT NO. A16, ASSUMPTIONS AND LIMITING CONDITIONS detailing the
appropriate assumptions and limiting conditions shall be included in the appraisal report;
DOCUMENT NO. A17, CERTIFICATE OF APPRAISER shall be included in the appraisal
report.
(c) A technical review of an updated appraisal report shall be performed.
(d) An appraisal report that has been updated by the letter method will not be accepted if a change of
value has resulted from a significant change in the nature of the appraisal problem or the market
itself.
5.2.G - DEFINITIONS
See 5.1.G
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Section 5.3
WAIVER VALUATION PROCESS
5.3.A - PURPOSE
This section of the Real Estate Services Operating Manual prescribes the Delaware Department of
Transportation’s standards, requirements, and procedures for establishing real property value in lieu of
the preparation of a formal appraisal report and is accomplished utilizing the Waiver Valuation Process of
real property needed for transportation and related purposes and is applicable to certain acquisitions of
real property, whether in fee simple or by easement, regardless of the location, type, or ownership of the
property being acquired.
5.3.B - AUTHORITY
49 CODE OF FEDERAL REGULATIONS, SECTION 24.102(c)(ii)
TITLE 29, CHAPTER 95, SECTION 9505(14)
5.3.C - SCOPE
The principle users of this section are Real Estate Services staff, contracted right of way professionals
acting as agents of the Delaware Department of Transportation and contracted fee appraisers tasked with
the preparation of valuing real property interests.
5.3.D - TRAINING
See 5.3.F.3(b)
5.3.E - DOCUMENTS
5.3.E.1 - Mandatory documents
(a) The documents listed below and inserted into this subsection is required to achieve a means to
uniformly document an Appraisal offer Summary prepared for the Delaware Department of
Transportation.
5.3.E.2 - Documents to be used relating general real property acquisition
(a) Document No. A18, Agreement to Waive Appraisal
(b) Document No. A19, Administrative Offer Summary
(c) Document No. A20, Subject Property Data Form
5.3.F - GENERAL
5.3.F.1 - General requirements
(a) The intended use of the Waiver Valuation Process is to streamline the valuation process and
minimize administrative costs thus allowing better utilization of those individuals licensed to
prepare more complex appraisal reports, whether in-house or by contracted out-sourcing. The
use of the Waiver Valuation Process does not deny compensation due an owner of real property
interests needed for a transportation project.
(b) The use of the Waiver Valuation Process can eliminate the need for the Appraisal Services unit to
conduct a technical review of real property interests valued under this process.
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5.3.F.2 - Applicable use of waiver valuation process
(a) The Waiver Valuation Process may be utilized when the estimated market value of a real property
interest or interests on a per parcel basis required for a transportation project is estimated at
$50,000.00 or less, inclusive of site improvements and cost to cure items. However, certain
monetary thresholds exist which sets forth when this process is applicable and is based upon the
funding source and is as follows:
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The Waiver Valuation Process can be used when Federal or State funding is used in any part
of the project when the estimated market value on a per parcel basis $10,000.00 or less;
The Waiver Valuation process can be used when Federal or State funding is used in any part
of the project and upon the approval of the Federal funding agency of a request by the
Delaware Department of Transportation to utilize the Waiver Valuation Process when the
estimated market value on a per parcel basis is over $10,000.00 and up to $25,000.00, or an
amount currently approved by the Federal funding agency;
The Waiver Valuation Process can be used when the estimated market value on a per parcel
basis is $50,000.00 or less and when the project funding is solely State funded.
(b) In all cases in which the established estimated market value on as per parcel basis is over
$10,000.00, the owner of the property shall be given the option of having an appraisal report
prepared. Under this circumstance, the Delaware Department of Transportation can ask the
property owner to waive the preparation of an appraisal report by having the property owner and
the Delaware Department of Transportation execute DOCUMENT NO. A18, AGREEMENT TO
WAIVE APPRAISAL.
5.3.F.3 - Administrative offer summary preparation
(a) The establishment of an estimated market value shall be developed and recorded utilizing
DOCUMENT NO. A19, ADMINISTRATIVE OFFER SUMMARY.
(b) Only those employees of the Real Estate Services Section or a contracted right of way
professional acting as an agent of the Delaware Department of Transportation that has
successfully completed the Appraisal Institute Basic Appraisal Principles Course and Basic
Appraisal Procedures Course or equivalent coursework by a training organization determined
equivalent by the Real Estate Services Section’s, Appraisal Services Manager can prepare an
estimate of market value for the Delaware Department of Transportation.
(c) The preparation of DOCUMENT NO. A19, ADMINISTRATIVE OFFER SUMMARY shall be made
by the appropriate acquiring District Right of Way Manager to a qualified Real Estate
Representative under his or her charge. This Real Estate Representative shall also be assigned
the task of negotiating for the acquisition of the property interest he or she is establishing the
estimated market value.
(d) The assigned Real Estate Representative, in coordination with the Real Estate Representative(s)
who prepared DOCUMENT NO. A3, PROJECT REAL PROPERTY COST ESTIMATE, will
compile applicable sales data information and any other pertinent information (i.e. site
improvement estimates, etc.). The data and information collected by the assigned Real Estate
Representative shall be the same type of data and information that would be gathered and the
same consideration shall be given to the adequacy and relevance of the data and information
collected as if the data and information was collected for the development and preparation of an
appraisal report that would be subject to a Technical Review.
(e) Upon the gathering of all data and information, the assigned Real Estate Representative will use
the data and information obtained to complete DOCUMENT NO. A20, SUBJECT PROPERTY
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DATA FORM. The purpose of this form is to document the factual information for the subject
property and summarize the comparable data and information collected.
(f) The assigned Real Estate Representative will complete DOCUMENT NO. A19,
ADMINISTRATIVE OFFER SUMMARY, which upon completion will establish his or hers
estimate of market value The estimates used in the preparation of this document should require
little explanation and should represent a range based on the data found and recorded on
DOCUMENT NO. A20, SUBJECT PROPERTY DATA FORM.
(g) The assigning District Acquisition Manager can, when he or she believes it is necessary, submit
DOCUMENT NO. A19, ADMINISTRATIVE OFFER SUMMARY and DOCUMENT NO. A20,
SUBJECT PROPERTY DATA FORM to the Appraisal Services unit for a Technical Review.
When this step is taken, the Appraisal Services Managers shall assign a qualified Real Estate
Representative to perform a Technical Review of the documents submitted. Upon a successful
completion of the review, the Real Estate Representative shall initial the DOCUMENT NO. A19,
ADMINISTRATIVE OFFER SUMMARY thus approving the per square foot rate of value and cost
estimate for any site improvements and/or cost to cure items to be offered to owner.
(h) The preparing Real Estate Representative shall place a copy of the approved documents into the
Appraisal File. The original documents shall be supplied to the property owner at the initiation of
negotiations.
5.3.G - DEFINITIONS
See 5.1.G
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