Chapter 55-1Appraisal ReviewGeneralAppraisal review is performed by designated Review Appraisers. The WashingtonState Department of Transportation (WSDOT) may employ Review Appraisers in eitherHeadquarters, the region, or by personal services contracts. For personal servicecontracting procedures and administration, see Chapter 1, Section 22.When available qualified state staff must be utilized before private consultants can becontracted.A qualified Review Appraiser shall review an appraisal of real property and/or propertyrights prior to initiation of negotiations.5-25-2.1ResponsibilitiesSection Manager, Appraisal and Appraisal Review ProgramThe Section Manager, Appraisal and Appraisal Review Program, responsibilities include:A. Resolving controversial appraisal review problems. Exception: The managermay not intercede in, or alter a Determination of Value (DV) (RES-214) made bya Review Appraiser.5-2.2B.Monitoring designated Review Appraisers to ensure the uniformity and qualityof appraisal reviews. This is done through spot check field and procedural reviews;also, by obtaining corrected, missing, and/or additional data and requesting correctiveaction on DVs.C.Interpreting the intent and meaning of the appraisal review requirements whenquestions arise.Region Real Estate Services ManagerThe Region Real Estate Services Manager responsibilities include:A. Assignment of appraisal reviews to designated Region Review Appraisers.B.Setting just compensation when the Review Appraiser is a fee consultant.C.Declaring and authorizing the purchase of uneconomic remnants when the ReviewAppraiser is a fee consultant.WSDOT Right of Way Manual M 26-01.25September 2020Page 5-1

Chapter 55-2.3Appraisal ReviewReview AppraiserThe Review Appraiser regards an acceptable appraisal as an important considerationin the completion of the DV and the appraiser as a consultant and market analyst. Thereview process establishes the approved “just compensation” (see Section 5-5.1.C.11).A. All appraisals are reviewed to:1.Ensure that appraisal reports contain or reference sufficient information (e.g.,studies or other previously submitted appraisals) to support the conclusionsof the report; also, that appraisal reports conform to established appraisalpractices and WSDOT requirements as described in the Appraisal Report Guide(Appendix 4-1).2.Ensure that the appraisal is equitable and that the property owner willbe receiving “fair and just” compensation in accordance with the Real PropertyAcquisition Act (Chapter 8.26 RCW), the Uniform Relocation Assistance andReal Property Acquisition Policies Act of 1970, as amended, and current eminentdomain law.B.The Review Appraiser may use a method of review that takes into -considerationvaluations of other properties on the project.C.The WSDOT staff Review Appraiser establishes the “just compensation” (usually fairmarket value, but never below fair market value) of the property and/or propertyrights and reports the com-pensation on a DV. The DV may be revised anytime priorto final settlement to reflect later evaluation evidence, a property owner’s appraisal,or project plan revisions. All DVs are documented with the original retained inHeadquarters and a copy retained in region.D. A fee Review Appraiser may not establish “just compensation” for WSDOT.5-35-3.1Preliminary ProceduresPreliminary ReviewIt is recommended that all projects consisting of significant numbers of parcels and/or complexity be inspected and reviewed prior to submitting project funding estimatesfor authorization and funding. This is done to save time and effort in the appraisal andnegotiation stages. An inspection team consisting of a region appraisal representative(supervisor, senior appraiser, or staff journeyman appraiser), a review appraiser, and arelocation agent (when applicable) identifies the following:A. Special types of appraisals and the need for specialists or consultants.B.Environmental and shoreline management problems.C.Public or semipublic agency parcels and railroads.D. A need for legal opinions.E.Page 5-2A need for plan modifications and revisions to avoid or mitigate damages.WSDOT Right of Way Manual M 26-01.25September 2020

Appraisal ReviewF.Chapter 5“Uneconomic remnants” and possible trade or exchanges for surplus properties orexcess right of way.G. A need for copies of leases for appraisal and -acquisition purposes that wouldestablish the ownership of buildings, structures, and other improvements asreal property.H. Items that will be appraised and acquired as realty fixtures.I.5-3.2Items that are determined to be personalty for relocation assistance purposes.Joint Inspection With OwnerFor all properties where improvements will be acquired, the review appraiser and arelocation agent are required to attend the appraiser’s joint inspection with the propertyowner and tenant, if any. This is for purposes of clarifying and identifying realty vs.personalty items as well as to ascertain ownership rights.5-3.3Desk ReviewThe Review Appraiser “desk reviews” all appraisals of each parcel to assure proper projectand parcel identification, adequate response to the assignment, application of propertechnique, completeness, and mathematical accuracy. The Review Appraiser is providedwith their own copy of the appraisal report.5-3.4Field ReviewThe Review Appraiser examines the subject property in the field and the market facts onwhich conclusions of value depend. Appropriate sources (buyers, seller, brokers, publicrecords) may be contacted to verify statements of fact, the adequacy of the marketsearch, and the appraiser’s understanding of the impact of the WSDOT plan on thesubject property. The Review Appraiser may contact other sources of information toestablish parameters of value or to determine whether additional expertise is required toassist the appraiser in completing an acceptable report.5-45-4.1Analysis of Appraisal ReportsRequirementsThe Review Appraiser analyzes the appraisal report to assure that the report:A. Conforms to the requirements of:1.The Appraisal Report Guide (Appendix 4-1).2.The appraisal contract or the Staff Appraiser Assignment form (RES‑203).3.Any special instructions.B.Clearly states the appraisal problem.C.Incorporates specialists’ opinions (e.g., value of timber, fixtures) as they contribute tothe value of the whole property, rather than as arbitrary additions to the value of thereal property.WSDOT Right of Way Manual M 26-01.25September 2020Page 5-3

Chapter 5Appraisal ReviewD. In the case of tenant-owned real estate (buildings, structures, and/or otherimprovements), the specialists’ opinions of value are to reflect two premises: (1)Contribution value to the whole property, and (2) Value for removal (salvage). Justcompensation for tenant-owned improvements is the greater amount.E.F.Clearly presents:1.An explanation of the appropriate evaluation principles.2.The market evidence and/or other supporting evidence.3.A list of items considered part of the realty as well as further comments on itemsthat might be in a “grey” area, e.g., drapes, dishwashers, stoves, special lightfixtures, when applicable; or buildings, structures, or other improvements to beadded to the appraisal.4.The value estimate.Excludes non-compensable items.G. Neither omits nor contradicts any factual data that was available to the appraiser.H. Contains no conflicting statements or erroneous conclusions.5-4.2Minor DeficienciesIn the case of minor deficiencies in the appraisal report, the Review Appraiser:A. Does not delay arriving at a DV.B.Page 5-4Makes notation of the following types of errors on a memorandum, sends thememorandum to the Region Real Estate Services Manager (RESM) (or AppraiserSupervisor) and on the DV notes: “See Memorandum dated .”1.Mathematical errors.2.Project identification data.3.Parcel numbers.4.Owner’s name.5.Parties to the transaction, excise tax number, and date of purchase for eithersales of the subject property or comparable sales.6.Location, zoning, or present use of either the subject property or of comparablesales.7.Nonconformance with the Appraisal Report Guide (Appendix 4-1) and/ordepartmental standards.WSDOT Right of Way Manual M 26-01.25September 2020

Appraisal Review5-4.3Chapter 5Major DeficienciesA. Major deficiencies are usually found in the following areas: analysis, reasoning,and conclusions. When the Review Appraiser finds that the appraisal report needsclarification or contains substantive errors, the following actions are taken:B.5-4.41.Prepares a memorandum stating the critical deficiencies or the needfor clarification.2.Transmits the original of the memorandum to the RESM and sends a copy to theSection Manager, Appraisal and Appraisal Review Program. Retains the reviewcopy of the appraisal pending receipt of corrections or revisions.3.Attends appraisal conferences as necessary and/or advises the RegionAppraisal Supervisor.After examination of the memorandum and a file copy of the appraisal report, theRESM:1.Confers with the Review Appraiser, the Region Appraisal Supervisor and/or otheraffected personnel as needed.2.Forwards the appraisal report by memorandum to the staff appraiser or byletter to the fee appraiser with directions necessary to produce an acceptableappraisal report.Unacceptable AppraisalsA. If after taking the actions specified in Section 5-4.3 an acceptable report is still notobtained, the Review Appraiser prepares a memorandum citing the reasons for the lackof acceptance. The memorandum is submitted to the Section Manager, Appraisal andAppraisal Review Program.B.The Section Manager reviews the appraisal report and the memorandum. The SectionManager either:1.Upon concurrence:a. Signs and dates the memorandum.b. Attaches the original of the memorandum to the original of the unacceptableappraisal report and places them in the Headquarters parcel file.c. Sends copies of the memorandum to the RESM and the Region AppraisalSupervisor.2.C.Upon nonconcurrence, returns the memorandum to the Review Appraiser statingthe actions to be taken or becomes the Review Appraiser and prepares a DV.The RESM (or Region Appraisal Supervisor) reviews the memorandum and:1.Attaches a copy of the memorandum to the unacceptable appraisal report in theparcel file.2.Gives a copy of the memorandum to the appraiser.3.Initiates action to secure an acceptable appraisal report from a different appraiser.WSDOT Right of Way Manual M 26-01.25September 2020Page 5-5

Chapter 55-4.5Appraisal ReviewOwner’s Appraisal ReportA. If the property owner submits an appraisal report—whether self-made or from anyother source—the Review Appraiser reviews it disregarding the report’s format andtakes the following actions as appropriate:1.If the owner’s appraisal report or any part thereof presents usefulvalue information:a. A new DV is prepared using the procedures specified in Section 5-5.b. Copies of the owner’s appraisal report are distributed in the same manner asif the report had been prepared by or for WSDOT.2.If the owner’s appraisal report does not present significant newvalue information:a. The Review Appraiser makes a copy of the owner’s appraisal report tobe retained by the reviewer in accordance with the Uniform Standards ofProfessional Appraisal Practice.The Review Appraiser returns the owner’s original appraisal report to theRESM together with a memorandum identifying the parcel and the project(number and title) and stating:(1) The appraiser’s name.(2) The date of the owner’s appraisal report.(3) The value reported.(4) The reasons for not preparing a new DV based on the owner’s appraisalreport. The Review Appraiser must state the specific reasons forrejecting the owner’s appraisal report so the owner will know why theappraisal was rejected.b. The RESM assures that the owner’s appraisal report is returned to theowner through the Region Real Estate Services Acquisition Agent. The RESMincludes a letter which clearly states the reasons the owner’s report wasunacceptable as a basis for a revised offer.Page 5-6WSDOT Right of Way Manual M 26-01.25September 2020

Appraisal Review5-55-5.1Chapter 5Determination of Value (DV) – Preparation/DistributionNormal Preparation/DistributionA. The Review Appraiser prepares the DV upon receipt of the copy of the appraisalreport. This appraisal report must contain an unbiased evaluation of all availablemarket value evidence and includes:B.1.A desk review as specified in Section 5-3.3.2.A field review as specified in Section 5-3.4.3.One acceptable appraisal report. More than one acceptable appraisal report maybe required by the Review Appraiser prior to the review if the proposedacquisition is complicated, or of a controversial value nature.4.A comparison of values to guarantee consistent value patterns between similarparcels on the project.The Review Appraiser fills in the following data on the DV:1.The number of the DV for this parcel (e.g., 1, 2).2.The Review Appraiser’s name.3.The project and parcel identification data taken from the right of way plan.When a prior acquisition from the same property has been completed, the parcelnumber(s) of the prior acquisition is inserted on the DV above the new parcelnumber by adding the following text:“Prior Acquisition Parcel No. .”C.4.The appraisal history which includes all appraisals made for WSDOT and allappraisals submitted by the owners that have been used as a basis for valuedetermination.5.The appraisal review history which includes all prior DVs.In the center section of DV #1, the Review Appraiser includes a narrative stating:1.The extent of the Review Appraiser’s inspection of property and sales, includingconfirmations.2.Any information with regard to hazardous materials as contained in theWashington State Department of Ecology’s Facility/Site HazMat Database.3.The adequacy of the property description in both the “before” and“after” situations.4.The differences between appraisals, if more than one appraiser was used, or ifthere is an appreciable change in value between an original appraisal and alater updating.5.A range of market evidence and whether the appraiser’s conclusions fall withinthe range.WSDOT Right of Way Manual M 26-01.25September 2020Page 5-7

Chapter 5Appraisal Review6.A statement of concurrence with the application of market evidence andfinal conclusions.7.Whether the appraisal follows special instructions and whether it contains anyrequired copies of specialists’ reports.8.“Before” and “after” values except for noted minimal and strip appraisals.9.An allocation of the value for the subject land and the improvements is shown orreferenced to an appraisal report sheet. Both the “before” and “after” situationsare described. Totals of “before” and “after” values are rounded to be consistent with normalreal estate transactions. The difference between the “before” and “after” values equals justcompensation except when the special benefits exceed the acquisitionplus damages. Identify acquired buildings individually. Identify fixtures appraised as real estate. Designate buildings, structures, signs, and other improvements ownedby tenant/lessees. Just compensation due the tenant/lessee for said items is determined by theWSDOT staff Review Appraiser at the higher of the two valuation premises,as defined in Section 5-4.1.D.10. If the appraisal and DV cover two or more parcels, an allocation of the justcompensation is made on an attached exhibit to the DV covering each parcel.11. If an “uneconomic remnant” is involved, see Section 5-5.2 below.12. Just compensation based on the appraisal(s). Allocation of this just compensationis made to acquisition, damage items, and benefits. If the Review Appraiser issatisfied with the appraisal but comes to different conclusions, the differencesare explained and any new supporting evidence is attached to the DV.13. The amount of the approved just compensation that is eligible for federalparticipation. If the right of way project does not have federal funds participation,the last sentence on the DV beginning “I further certify . . . .” is crossed out.14. The date of the approved just compensation, which is the date of the lastinspection by either the appraiser or the reviewer. The signature date is thedate the Review Appraiser signs the DV and does not precede the date ofjust compensation.15. Only a WSDOT official may declare just compensation. A fee Review Appraisermay only recommend just compensation. When a fee Review Appraiser is hired,the DV must include a Statement at the bottom of the document for concurrenceby the appropriate official of WSDOT.Page 5-8WSDOT Right of Way Manual M 26-01.25September 2020

Appraisal ReviewChapter 5D.1.If the Review Appraiser is not satisfied with the appraisal or corrections,a second appraisal may be requested in a memorandum addressed to the RESM.The memorandum should include the reasons why the corrections or secondappraisal are needed.2.If the review appraiser is unable to approve an appraisal as an adequate basis forthe establishment of the offer of just compensation, and it is determined that it isnot practical to obtain an additional appraisal, the review appraiser may presentand analyze market information to support an approved value. In this instance:a. The Review Appraiser becomes the “appraiser of record”b. The Review Appraiser prepares a memo explaining the reasons for anydiscrepancies between the appraisal and the DV. This memo will be deliveredto the property owner with the offer to purchase.3.If a new DV is prepared, the Review Appraiser:a. Numbers each DV for a parcel in sequential order, e.g., DV #2, DV #3.b. Fills in the appraisal and review history.c. Evaluates all the latest appraisal evidence or map change information.d. Gives the justification for the changes on the new DV and referencesthose items which appeared on the previous DV which still pertain to thecurrent DV.e. Completes the DV in the usual manner.E.Private Access Easements for Transfer – When a R/W plan shows an “AccessEasement for Transfer” across a private owner (A), the servient tenement, to serveanother single private owner (B), the dominant tenement, we cannot condemn forthe easement. We cannot condemn to provide private access to a third party becausethis situation is not a public use, as defined in RCW Review Appraiser prepares a two-premise DV for each property. The“before” description and valuation is the same for both premises. The “after”description and valuation is different.a. For Owner A, the first premise in the “after” situation is without theeasement. The second premise in the “after” is with the easement.b. For Owner B, the first premise in the “after” situation is without the easementfrom Owner A. The second premise in the “after” is with the easement fromOwner A.F.The Section Manager, Appraisal and Appraisal Review Program, routes the original ofall DVs to the permanent file.WSDOT Right of Way Manual M 26-01.25September 2020Page 5-9

Chapter 5Appraisal ReviewG. The Region Appraisal Supervisor:5-5.21.Forwards one copy of the DV to the RESM.2.Forwards one copy of the DV to the Region Acquisition Supervisor.3.Enters DV data into the computer system.Uneconomic RemnantA. On behalf of WSDOT, the Review Appraiser on Staff determines whether a-remainder (or any part thereof) qualifies as an “uneconomic remnant” based uponthe following guidelines:B.1.An “uneconomic remnant” is a remainder which has little or no utility or value tothe owner.2.Even though a parcel may be considered to have little or no value or utility in the“before” situation, when the acquisition leaves a remainder, that remaindershould be declared an “uneconomic remnant.”The final paragraph on the DV shall clearly identify the “uneconomic remnant,”support its declaration as such, and state its value. This paragraph is underlinedor typed in italics.Note: The DV is the acquisition agent’s authority to offer to purchase an “uneconomicremnant.”C.5-5.3A Review Appraiser on contract with WSDOT may recommend whether a remainder(or any part thereof) qualifies as an “uneconomic remnant” based upon thoseguidelines above.Surplus PropertyWhen it has been determined that a state-owned real property or property right(including any improvements thereon) has become surplus to WSDOT’s needs,an appraisal is prepared as specified in Appendix 4-1. The Review Appraiser:A. Reviews the appraisal as specified in Section 5-4.B.Completes a DV for Surplus Property.C.Returns the completed DV to the Section Manager, Appraisal and Appraisal ReviewProgram. The Review Appraiser:1.May include data and explanations if data is weak or insufficient.2.May set an indication of a value range rather than a specific value.3.May recommend the means of disposal.D. Access modifications shall be appraised on a “before and after” premise. If theappraised surplus property right is an access modification, establishes the value of theaccess rights to be conveyed at no less than 1,500 per WSDOT’s policy for accessconveyances in Section 1420.09(2)(c) of the Design Manual M 22‑01.Page 5-10WSDOT Right of Way Manual M 26-01.25September 2020

Appraisal Review5-5.4Chapter 5Minimum Payment PolicyIt is the policy of WSDOT that an acquisition DV will not be prepared for less than 500for real estate except in the event of special benefits in which case the minimum amountof the DV is zero. WSDOT’s minimum payment policy is not applicable to local agencies;however, a local agency can create a policy if desired.5-6Appraisal Review for Other Public AgenciesAppraisal reports from local public agencies and other state agencies are reviewed forconformance to federal standards and WSDOT operating requirements for validityand support of value conclusions. (See Appendix 4-1, Appraisal Report Guide.) Thisnecessitates that the reports be accompanied by a copy of the appraiser’s contract anda determination that the report has complied with the agency’s appraisal contract. Theagency will attach a letter requesting the review, along with:A. A dated map showing the parcel boundary.B.The before, after, and/or acquisition areas.C.Sufficient engineering data to show the effect of the project on remainder properties.The submitting agency is responsible for obtaining necessary replacements forunacceptable appraisal reports and for obtaining any substantive revisions of inadequatereports furnished to WSDOT by the agency. Requests for appraisal review service of lessthan WSDOT standards (such as field inspection and -independent value conclusions) maybe refused and returned to the agency.Typically, WSDOT Review Appraiser is not authorized to set just compensation for localagencies. This authority is given to an official within the agency.The Review Appraiser prepares a “Certificate of Value,” in accordance with the LocalAgency Guidelines M 36-63. The Certificate of Value includes a Statement at the bottom ofthe document for concurrence by the appropriate official of the local agency.WSDOT Right of Way Manual M 26-01.25September 2020Page 5-11

Chapter 5Appraisal ReviewPage 5-12WSDOT Right of Way Manual M 26-01.25September 2020

5-3.3 Desk Review The Review Appraiser “desk reviews” all appraisals of each parcel to assure proper project and parcel identification, adequate response to the assignment, application of proper technique, completeness, and mathematical accuracy. The Review Appraiser is provided with their own copy of the appra