Here are some of the top reasons home sales fall through.
Condemnation is a money term you need to understand. Here’s what it means.
What is condemnation?
Condemnation occurs when a public authority, such as the local government, seizes a piece of private property for public use. The public authority must pay the owner a fair market price for the property.
Eminent domain gives a public authority the right to seize property in the name of public interest. The Fifth Amendment gives the government this right.
The government can take land for both private and public projects that are deemed beneficial for the public as a whole. The property owner does not have to consent to the seizure.
Some of the reasons that the government might take land are to:
- Construct a new school.
- Improve or expand the road system.
- Install or maintain infrastructure for utilities.
- Build a hospital in an underserved area.
When the public authority exercises condemnation, the owner receives an offer for the property’s fair market value. If the owner feels the offer is too low, he or she can dispute the appraisal and try to secure more money.
Condemnation frequently occurs when the government needs land for publicly beneficial projects.
For example, if your town’s roads are incapable of safely accommodating the traffic in your area, the government may decide to expand the existing roads.
However, to complete the expansion, it has to acquire several nearby properties, including your home. You do not want to give up your home, but since the expansion will make the road safer for all of your town’s residents, you have to sell your property to the government. This is condemnation.
The first offer the government makes is known as a pro tanto award. However, you may feel the pro-tanto offer does not take into account characteristics of your home that increase your property’s value. You can then hire a lawyer to help negotiate a higher price for your property.
If you have to sell your home, check out Bankrate’s mortgage calculators to calculate your new mortgage payment.
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