How is the market value of a property assessed?

Selling a share of an apartment is always a troublesome and not very profitable business for its owner. Because the total cost of individual shares of housing is significantly less than the cost of selling the entire apartment to one person.

Why is that? Because when buying an apartment as a whole, the buyer overpays for a certain comfort of the sole owner. And taking possession of part of the living space where other owners also live is a less convenient option for the buyer. To understand how to calculate the value of a share of an apartment before selling it, you need to consider many hidden factors.

It happens that the apartment has a number of serious encumbrances, in which it is almost impossible to sell your part of the living space without greatly underestimating its real value. But there are situations when the price of a share can rise by as much as twenty percent of its average market value. In order not to miss out on such benefits, we recommend that you conduct a full assessment of your property with the involvement of a competent specialist.

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How much does a share in an apartment cost?

The highest use, or BUE, is the use of real property that:

• maximizes its productivity, that is, corresponds to its highest value;
• physically possible;
• legally permitted on the date of determination of value;
• financially justified.

In accordance with the NEI principle, when determining the market value of an appraisal object, the behavior of a typical buyer and a typical seller is modeled, each of which is aimed at obtaining maximum benefits from the transaction. The most effective action of owners when selling shared property is to sell the apartment as a whole and divide the amount received proportionally among themselves (the most effective method of sale in terms of timing and results obtained).

If the participants in shared ownership fail to agree, then the share in the apartment is put up for sale. Moreover, the price of such a share is not equal to the product of the relative size of the share and the total cost of the object. That is, the value of the share does not correspond to the value of the square meters per share, since the owner is limited in the rights and comfort of cohabiting with other owners. Therefore, transactions occur at a certain discount.

In the media, there are opinions of realtors and real estate market experts about abstract ranges of such discounts, but these entities are not required to confirm their words, unlike appraisers. To analyze the market value, we used actual prices in Moscow when selling shares in apartments on the CIAN website.

Thanks to the developed real estate market and a large database of objects, when viewing an ad on the CIAN website, the service calculates the average price per square meter in the building where the apartment is located. Therefore, it is possible to determine with a high degree of certainty how much a similar apartment would cost if ownership rights to the entire residential premises were transferred. We compare the cost of the share and the average apartment in a building of the corresponding area and get the required discount amount.

That is, as a discount, or discount, the difference in price between the cost of 1 sq. m of share and the cost of 1 sq. m of an apartment of similar size, located in a building at the same address.

Shares less than 1/10 were not included in the analysis - such properties are sold mainly to obtain registration at the place of residence, so different pricing applies. Advertisements for room share sales were excluded. Apartments in buildings that are included in the renovation program and will be demolished were also not considered. The sample included 298 advertisements.

The dependence of the discount on the share size is graphically shown in the figure:

The regression equation has a correlation coefficient R2=0.0088, which indicates the absence of a reliable stochastic relationship. The amount of the discount when selling a share in an apartment does not depend on the size of the share.

The average discount values ​​for the most common share sizes are very close, ranging from 26–29.2%.

Table 1

A surprising fact: the more rooms, the higher the average discount. Although the opposite is more logical: when buying a share in an apartment with several rooms, there is the prospect of allocating a share in kind and managing your part of the living space. Such shares should cost more, but it turns out the opposite.

table 2

It makes sense to indicate the main identified factors influencing share pricing:

• number and composition of owners;
• number and composition of residents/registered in the apartment;
• presence of ownership conflict;
• the ability to view before purchasing;
• other factors specific to the residential real estate market.

After analyzing the advertisements, we can conclude that the cost of 1 sq. m. m share is lower than the cost of 1 sq. m of an ordinary apartment by an average of 28.7%. There was no correlation between the discount and the share size.

• Pravo.ru

Requirements for a property valuation report for the court

An assessment may be assigned without fail if the information provided is unreliable or incomplete. If the plaintiff is exaggerating the claims and the defendant is trying to reduce them, a real estate valuation report prepared by an independent expert will become the main document for the court in making a decision. If the report is drawn up correctly and complies with Russian legislation, federal and international standards, then it is an official document with legal force.

The results of property valuation for the court must be justified; the expert appraiser must indicate all approaches and indicators that were used, calculation formulas, conduct a market analysis, and draw up a detailed description of the property. To do this, the independent appraiser must be sufficiently qualified and experienced. Often, when considering cases, his presence in court is required. The law requires that he be a member of the SRO (Russian Society of Appraisers) and also have a professional liability insurance policy. He can work on the staff of an appraisal company or conduct private practice.

Estimated

A real estate appraisal for court in Moscow can be ordered at. The initial consultation is free. We provide all types of appraisal services (for processing a loan, inheritance, marriage contract, purchase and sale transactions), represent clients' interests in courts, and work with legal entities and individuals. If you apply again, you get a 20% discount.

The company employs eight experienced appraisers, including those specializing in forensics. Their professional liability is insured. An agreement is signed with the client, it specifies the goals, objectives of the inspection, details of the parties, the amount and procedure of payment. A personal manager will inform you about the progress of work, arrange an inspection time, and answer questions.

We guarantee confidentiality, reliability and unambiguity of the results. The report complies with legal requirements, is bound, numbered, and sealed. All calculations were carried out correctly, the conclusions were substantiated, and the approaches used comply with federal and international standards. It also contains a detailed description and photographs that allow unmistakable identification of the object. The judge will have no reason to reject the report prepared by our experts, and opponents will not find inaccurate data in it.

What is retro-valuation in forensics?

Litigation can last for years. During this time, significant changes may occur in the real estate market. For example, if the subject of the dispute is an apartment that was sold several years ago without the knowledge of the co-owner, who now wants to receive compensation through the court, then the amount of these payments will be based on its value at the time the transaction was concluded. That is, property is assessed retrospectively based on archival information, as well as indexation of the amount using various coefficients.

In this case, the appraiser requires a standard package of documents:

• customer's passport;
• technical documentation (cadastral, technical passport with plan and explication);
• certificate of ownership.

The examination takes 2-3 days. For commercial buildings and land plots, the list of documents is slightly different, and the deadlines increase to 5-7 days.

Assessment procedure and required documents

If you decide to conduct a property valuation, consider the procedure:

• Select the appraiser to contact. But the price of real estate valuation services depends on the experience of the specialist and the promotion of the agency. If the bank requires an assessment, it will give you a list of recommended organizations or entrepreneurs that you can contact.
• Conclude an agreement with the appraiser, including the terms of work, their plan and the specialist’s remuneration.
• Cooperate with the appraiser and provide requested documents. Most often requested:
• passport of the customer as an individual or certificate of registration of the organization and passport of the manager;
• document confirming the rights to real estate;
• documents from the BTI;
• an extract from the Unified State Register of Encumbrances confirming the absence of encumbrances. Its electronic version, certified by the digital signature of Rosreestr, can be obtained within 6 hours on the EGRN.Reestr for 200 rubles.

At the very end, the specialist generates a report that gives the customer an estimate. It contains all the information about the work performed: the object being assessed is described, a market analysis is performed, the chosen approaches are explained and the assessment process is described. Additionally, the report contains documents that the specialist used in his work.

Real estate valuation is needed for registration of a mortgage, loan, inheritance, purchase and sale. An important document that the specialist will request is an extract from the Unified State Register of Real Estate about the absence of encumbrances. Order your USRN extract right now and receive the finished document within 6 hours.

Features of judicial real estate valuation

Various real estate objects (residential or commercial) may appear in legal disputes:

• apartments (rooms);
• Houses;
• cottages, dachas;
• land.
• office buildings;
• garages;
• technical structures;
• warehouse, production premises;
• Construction in progress.

When determining the market value of an apartment for the court, the expert takes into account the general state of the real estate market in the region, as well as criteria relating to the building in which it is located and the housing itself. Pricing factors include:

• location;
• transport connection;
• infrastructure development;
• year and type of construction, degree of wear;
• number of storeys;
• condition of the local area, entrance;
• availability of an elevator, security, parking;
• square;
• number of rooms;
• layout;
• finishing;
• presence of a balcony.

The demand for commercial real estate depends on the intended purpose, the availability of communications, a separate entrance, and the possibility of redevelopment. It is necessary to take into account a lot of data, compare it with similar analogue objects, adjust the results and, based on these calculations, determine the final price.

When dividing a property, an assessment (forensic examination) carried out by a disinterested person will provide the necessary level of reliability, which is more likely to satisfy all parties to the conflict. The same applies to disputes with government agencies when the owner of property seized for state needs does not agree with the amount of compensation or the tax rate if he believes that the property is overvalued. Also, the amount of the state duty upon entering into an inheritance will depend on the value indicated by the appraiser.

During a lawsuit over a flood or fire, no matter whose fault it occurred, a fair assessment of the damage is also needed to determine the cost of restoration and repair work. If you are the culprit, you will not have to overpay, and if you are the victim, you can count on sufficient compensation. The report will not be the last argument in negotiations with the insurance company.

How property valuation is carried out: valuation methods and procedures

property valuation methods depends on the type and characteristics of the property being valued, as well as on the availability and completeness of the necessary information about the property. It is imperative to check the feasibility of using each of the three methods:

• costly - an analysis of the necessary costs for the creation of similar property or its restoration is carried out;
• comparative – the calculations involve property similar to the one being valued and the supply prices on the market of objects similar in parameters are used;
• profitable - an analysis of possible income from owning or disposing of property in the future is carried out, profits and expenses during operation are taken into account, as well as the possibility of resale of the object.

Please note that the appraiser must indicate in the Assessment Report the rationale for the choice, and if it is impossible to use, a reasoned refusal to use one or more methods.

Our specialists are always in touch. If you have any questions or would like to order an independent assessment, call us or leave a request!

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In what cases is an independent assessment of real estate by a specialist required?

According to the law, real estate assessment can be carried out at the personal request of the customer or on a mandatory basis. You need to contact real estate valuation services in the following cases:

• registration of a mortgage;
• liquidation, reorganization or bankruptcy of the company;
• contribution of real estate as a contribution to the authorized capital;
• privatization and insurance of real estate;
• attracting investments (assessment of property is needed to confirm the real size of the company’s assets);
• obtaining a loan secured by real estate;
• sale of state property;
• property disputes.

These are not all cases in which an assessment from a professional is required. In any case, you will be notified in advance if the procedure is necessary.

You can order the services of an appraiser if you want it yourself. For example, for the fair division of an inheritance or when agreeing on a price for a purchase and sale transaction.

Advantages of property valuation in

We know how convenient it is to get professional advice online, clarify the list of necessary documents by phone, send them by email, order a Property Valuation Report without having to travel to the other end of the city, and receive it by courier to your home or office . That is why on our official website you can order a consultation with an appraiser or a call back to discuss the timing of the work and the cost of services, agree on the time of the inspection, express your wishes and choose a convenient payment method. Advantages of cooperation with our appraisal company:

• absence of template solutions - we always approach each object and any task individually;
• high quality of services provided - the company has implemented a quality control system;
• we guarantee the confidentiality of any information received from the client and in the process of work;
• all our Reports comply with the requirements of domestic legislation and government authorities;
• we provide free consultations and accompany the Reports until they are accepted by the target authority;
• you receive a new, higher level of service.

You can bring documents for assessment to our office or send them to us by email. You will certainly appreciate the efficiency, high professionalism and affordable cost of our services.