How does the team guard against “price inflation,” when the owner learns that the federal government is interested in a site?
If the property owners know the total site budget, then they often expect that the government has “deep pockets.” Many times, the owners will ask how much site money has been budgeted and expect that GSA can offer much more than the AFMV. GSA must control property owners’ expectations by addressing the specific property value and answering the property owners’ questions in an honest, straightforward manner during the site investigation. Maintaining the competitive process as long as possible also discourages this type of expectation. The owner should be advised that the appraisal will be based on the property’s highest and best use. Any perceived increase or decrease in the value of the property due to the proposed project cannot be considered in the AFMV. Only arm’s length transactions (or comparable sales of property) are taken into consideration in the valuation of the property. Purchases under the threat of condemnation, or those involving other considerations such as special finan
