What is an acceptable discount for fractional interest ~ Partioning

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How to value Fractional Interest in Real Estate ~ Partitioning costs.
 
“How do I divide or value property that is owned as Tenants in common Imagine that you own a property or a parcel of land with another person – a sibling, a friend, or a spouse. But then your interests diverge; you and that person have different ideas about what to do with the property; in particular, how to use, improve, or dispose of it.
Say, for example, one of you wants to build or expand a house, the other wants to start a farm. Or that one of you wants to sell the property, the other wants to maintain it for generations. Perhaps one of you wants to rent it out, the other wants to leave it unoccupied until some future date when it will be sold. Your efforts to negotiate or compromise are getting you nowhere; you’re stalemated.
A partition, or division, of property can be arranged on a voluntary basis if all owners agree to it. However, if they don’t agree, a judge can order a partition of the property based on one owner’s request. If done gracefully and with agreement, it can result in a more efficient splitting of the property where all of the former owners are happier owning their own portion.” This explanation is provided by Brian Farkas, attorney at law. Mr. Farkas is an associate attorney with Goetz Fitzpatrick LLC in New York.
 
The interesting valuationth question arises on how to value fractional interest of real estate. Believe it or not, the IRS accepts partitioning costs in order to calculate discounts for valuation purposes for Real Estate valuations as well.   This can be an acceptable way to develop a discount for fractional interest.  Something well worth understanding for such as issues as “Tenants in common”.    Definitely worth knowing.

Johnson Appraisal Group was voted among top 10 Appraisal Firms in Arizona for 2016!

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Ranking AZ 2016We are pleased to announce that for the second year in a row, Johnson Appraisal Group was voted among the top 10 Appraisal Firms in Arizona by, “Ranking Arizona.” The Best of Arizona Businesses.  Thank you to our clients, colleges and friends for voting for us.

RICS elects Chuck Johnson to “Member”

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We are pleased to announce that Chuck Johnson was recently elected as a, Professional Member of The Royal Institution of Chartered Surveyors. As a member of the RICS, Chuck is now a fully designated member of this prestigious professional international valuation organization.

“The RICS headquarters is in London with its main support functions in Coventry. There are regional offices in the United Kingdom, across mainland Europe, in China, Hong Kong, Singapore, Australia, the Middle East, Sub-Saharan Africa, North America and Brazil.

In 2015, there were RICS-qualified professionals in more than 140 countries. The total number of those accredited worldwide was 120,000, plus student membership of 81,000. The majority of accredited individuals or members are still based in the United Kingdom with large numbers also in mainland Europe, Australia and Hong Kong. There is now a strong growth globally, and particularly in China, India and the Americas.

The RICS has close links with many national surveying institutions and is a founding member association of the International Federation of Surveyors (FIG). Within the RICS the primary areas of practice represented at FIG are geomatics (land and hydrographic survey), environment, planning, construction and valuation.

The RICS works in close collaboration with other professional bodies, central banks and international organisations such as The United Nations, World Bank and The European Union. In 2013 the RICS was a founder member of the coalition to develop International Property Measurement Standards, which launched its first standard – for measuring office space – in November 2014. In 2014 the RICS was a founder member of the coalition to develop International Ethics Standards. In each case, coalition member bodies are committed to implementing the new standards through training and guidance for professional practitioners.”