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Dana L. Grover Associates

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Partial interest valuation


Anything less than full ownership -- called "fee simple" in deeds and conveyances -- by a single person or entity is a "partial interest," sometimes known as a "fractional interest." Here at Dana L. Grover Associates, we have experience in the appraisal of partial interests. It's a specialty and discipline that takes unique expertise and training that few appraisers possess.  You can be assured we're well qualified to deliver an opinion of value on a partial interest.


When might you need a partial interest valuation?


With residential properties there can be various reasons for needing to know the value of a partial interest.  For instance, what is the value of a home when there is a life estate involved?  Conversely, what is the value of that life estate?  A professional appraiser with the required knowledge and skill to analyze the situation will be able to provide a professional opinion of that value.


Or suppose a property is left to several heirs who inherit various per centages of the ownership.  If one of the heirs wants to sell his or her share, what is that share worth?  If it is a 20% share, for instance, of a One Million Dollar property, could that heir get 20% of the value, $200,000, on the open market?  Probably not, and most likely, not.  What stranger would be willing to pay $200,000 for partial ownership in the property?   They may want to buy into the property, but at a discount, for something under the $200,000.  A qualified appraiser can provide a supported opinion of that share's fair market value.


In divorce or dissolusionment of a partnership proceedings, you might need to fairly value one party's interest in real property. Sometimes, particularly in partnership situations, it's not simply a matter of appraising the entire property and dividing by the number of owners. A fractional share of property may sell at a discount to reflect lack of control, costs of and barriers to sale. You need the judgment of a professional appraiser.


You might need the value of rents or leases on a property, but not the underlying value of the real estate. This is more complicated than it sounds, and isn't just a matter of how much a tenant is currently paying. A professional, well trained appraiser will examine rents in the market to determine fair market value of rents or leases. If a tenant is paying below market value, they might be able to sublet at a profit. If they're paying over market value, their likelihood of moving on when the lease term is up increases. There are many things requiring the professional judgment of an appraiser that factor into the calculation.


You might need to know the value of a proposed or existing easement.  An easement is a right to use property, without owning it.  How much is it worth to your neighbor to build a driveway across part of your property for entry to and exit from his property, rather than an alternate route that may be more costly to build?


You might need an appraisal of your (or your customer's) interest in a timeshare or condominium.


Because there are so many ways the "bundle" of rights to property can be divvied up, when you order an appraisal you might need a partial interest valuation and not even know it. You should be sure the company you hire is qualified to perform partial interest valuations. Here at Dana L. Grover Associates, we are. Browse our website to learn more about our qualifications, expertise and services offered.