[StBernard] Residents at oil spill site told not to move back

[Westley Annis]

Westley,

In light of this artice, perhaps it can be better understood my conclusions
as a real estate appraiser for those properties within the oil spill zone.
It is my opinion (for you and other homeowners whose properties I have
appraised) that any property within the oil spill zone is "worthless" - at
this time.  Why the disclaimer "at this time?"

In my experience as an appraiser whenever I go to perform an inspection on
the property to be appraised, if I detect any type of substance on the site
which could pose an environmental problem, I have to immediately inform the
lender or buyer.  Lenders immediately kill the loan because as they have
explained to me when such an occurence takes place it is normally reported
to the DEQ/EPA.  At that point, either or both of those agencies must
investigate and if the report is accurate the property is declared an
"environmental hazardous site" - and typically such a declared contaminated
site cannot have ownership sold or transfered.  And, the bottome line is if
you can't sell it, then it has "no value."

Now, this isn't to say that after the site is properly decontaminated and
given a green light by DEQ/EPA that it won't sell or have any future value.
However, when a property is appraised, it is appraised at it's "highest and
best use" at that point and time - not a month down the road, six months or
a year.  Also, the fact that a given property is contaminated and cannot be
sold or
transfer ownwership - compared to someone else who can sell because their's
is not contaminated - puts you and your property at a disadvantage in the
realty market.  And that makes sense why some people feel they are entitled
to damages as a result of hurting the property's value as well as being
restrained from selling it on the open market.

This is why I have said all along that it only makes sense that any type of
settlement between the oil company and property owners has to take into
account the "pre-Katrina" market value of the property - and not just the
square footage of the house or lot.  Too many times I've seen identical
homes next to each other that have "significant" differences in value -
normally because one home has undergone serious renovations and updating
while the other hasn't.  Or, one home might be on a bigger lot - which gives
it a higher value.  Thus any contamination that would prevent either from
being sold or transfered obviously hurts the higher valued home of the two
But if you're just going off of square footage of the home then what good
did it do for you to take extra care of your property and update it, or buy
a bigger lot to put your house on?

I have been called by many people telling me what Murphy has offered them
and asking my opinion if it is a "good offer."  In all honesty, I tell
them -  I'm not sure....but they should consider this.  First, as I pointed
out above, do they feel "their" home is in better condition, more updated
and of higher value than their neighbor's home which is about the same.  If
so, don't they feel they are entitled to more damages?

Second, I recommend they call the contact person at Murphy and ask them for
detailed documentation explaining how the oil company arrived at the dollar
figure to offer settlement.  Why $12 per foot as opposed to $6 or even $25.
Why $2,500 per household member as opposed to only $1,000 or $5,000.  Murphy
"has" to be basing this off of something - some previous incident elsewhere,
some type of mathematical formula to arrive at what they are offering.  If
they cannot explain themselves on this....then I might be suspicious that
the offer is too low.

For the record, my home on Veronica Drive had oil - and I have not yet
contacted Murphy.

As far as Murphy cleaning up each site, they would have to do that anyway -
either through EPA directive or court order (due to litigation).  So don't
look at that as "something extra they're throwing in" to any settlement
offer...they are legally obligated to clean up your site whether you accept
their offer or not.

Again, let me clarify that I am not suggesting to anyone that they accept or
decline Murphy's offer.  I am only saying that the property's pre-disaster
market value should play a big part in the dollar figure settlement AND you
should ask Murphy how did they arrive at the dollar figure equation to their
offer.

If I can be of assistance to anyone, even if you just need help on how to
properly measure your home and property, feel free to give me a call.

Best of luck to everyone involved in this mess,

John Scurich
Louisiana Certified Residential Real Estate Appraiser
985-882-9421 / 504-722-6662
email: scurich at bellsouth.net