A partial interest discount is allowable by the IRS when there is less than a 100% interest in the ownership of the Real Estate. This applies to the business entities that own real estate as well. The discount relates to the lack of control over the operation of the real estate and the lack of marketability due to the challenges with selling an interest that is not easily financeable.
Typically, discounts apply to the gifting of a fractional interest or death of an individual that owns a fractional interest in real estate. Discounts for lack of control and marketability have been upheld by the courts and therefore should be considered when valuing a fractional ownership interest. The IRS requires the appraisal to be done by a qualified appraiser.
Pacific Appraisers has experts in both the residential and commercial real estate valuation. For more information or questions please contact Shain Holden at 831-607-3800.
Zillow came out with their median home values over the last year as well as their prediction for what home values will be over the next year. See below:
The median home value in California is $490,100. California home values have gone up 6.9% over the past year and Zillow predicts they will rise 1.5% within the next year. The median list price per square foot in California is $281. The median price of homes currently listed in California is $473,900. The median rent price in California is $2,500. Click here to read the full zillow article.
Bay Area home prices jumped 11% compared to a year earlier. With little supply and high demand the housing market continues its robust price gains. Click on the link to read the full article: http://www.bizjournals.com/sanfrancisco/news/2017/03/24/bay-area-home-prices-pop-oakland-houses-sell-fast.html
Ryan Whitelaw, MAI has created a video to help borrowers, trustees, heirs, attorneys, and accountants know what items the commercial appraiser will need in order to best perform a commercial appraisal. Please click here to see the video: https://youtu.be/WvGCBSbf3ys
Tim Edwards, Pacific Appraisers Chief Residential Appraiser, will be co-instructing at the Society of Chief Appraisers conference on November 21st in Oakland. For more details please click here: http://www.societyofchiefappraisers.org/enroll-now/
Pacific Appraisers’ Ryan Whitelaw MAI and team will be attending the Appraisal Institute annual fall conference in San Francisco. See below for more details:
Friday, October 16, 2015
San Francisco Marriott
780 Mission Street (at 4th Street), San Francisco
ANNUAL FALL CONFERENCE celebrates 65 consecutive years in San Francisco!
12 Breakout Sessions featuring over 30 presenters
Retail Market Update
Supporting Residential Adjustments
Medical Marijuana and Commercial Real Estate
Cool Appraisal Technology: Tools, Tips & Tricks
How to Diversify and Build a “Bubble-Proof” Business
Residential Market Update: The Impact of Millennials on the RE Market
Lessons Learned from Very Complex and Highly Unusual Valuation Experiences
Changing the Game: Redevelopment of Sports-Related Venues
Lessons from California Litigation Involving Appraisers
Developing Green and High Performance Real Estate
State of the Profession
Click here for more information.
Ryan Whitelaw, MAI and Tim Edwards from Pacific Appraisers will be speaking at the Northern California Chief Appraisers meeting on May 6th in San Francisco. For more information on the Society of Chief Appraisers click here. To receive the flier for the upcoming Northern California Chief Appraisers meeting please respond to this post or send us an email.
The median home price in Santa Cruz County was $775,000 in March of 2015. This us up a whopping 15.7% from a year earlier. The number of sales in March were 123 which is 7% higher than a year earlier. There are currently 255 active listings which is down 35.6% from a year earlier (where is that inventory of homes????). We are still in a sellers market and until we get more inventory it should stay that way.
Tim Edwards, Chief Residential Appraiser at Pacific Appraisers, will be on the panel discussing the new Collateral Underwriter and its impact on appraisers. To get more information on the event and topics that will be covered click here.
By Ken Harney
Excerpts: Zillow CEO Spencer Rascoff…says Zestimates are “a good starting point” but that nationwide Zestimates have a “median error rate” of about 8%.
Shoppers, sellers and buyers routinely quote Zestimates to realty agents – and to one another – as gauges of market value. If a house for sale has a Zestimate of $350,000, a buyer might challenge the sellers’ list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000 when Zillow has it at $685,000.
My comments: Ken Harney is well know, nationally syndicated real estate writer. We are hoping that a lot of people read this article so they understand the pitfalls of relying too heavily on Zillow. Zillow does have a great data base of sales and wonderful graphs, but their Zestimates have a large margin of error. AVM’s like Zillow work best in conforming neighborhoods with homes that are less than 10 years old.
What do you think about Zillow? Post your comments.