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.
General concepts
When an apartment is in common shared ownership of several people, each owner has his own share in the right to this apartment.
Each owner has the right to dispose of his share in the same way as any other property - he can sell, exchange or donate it. Accordingly, the share in the apartment can be valued in monetary terms. Most often in practice, an assessment of the share in the right to an apartment is necessary in the following cases:
- redemption of a share by another owner;
- sale of shares on the open market;
- division of property between spouses or heirs;
- registration of inheritance with a notary;
- determination of the tax base for the correct calculation of tax.
In addition, when exchanging housing, it is often necessary to estimate the share of the child registered in the apartment. The value of the child's share cannot be reduced during the exchange process and appropriate control is carried out by state guardianship authorities based on the results of an independent assessment.
In situations where a share in an apartment is subject to sale on the open market (or such sale is implied), its market value should be assessed. The market value of a share in an apartment is not proportional to the value of the entire apartment. That is, when selling a share in an open, competitive market, the cost of 1 sq.m. the total area in the share of the apartment will be less than the cost of 1 sq.m. in a similar “whole” apartment.
Let us clarify this statement with the following example. If you have 1/2 share in an apartment, then its market value will not be equal to half the cost of the apartment - it will be less. Why less? The fact is that by purchasing a share in an apartment, the buyer is actually purchasing communal housing, not individual housing, with all the ensuing inconveniences and risks. Therefore, shares in apartments that are sold on the open market are cheaper than similar apartments that are sold as a whole (in terms of one square meter of area). The amount of discount (discount) to the cost of 1 sq. meters depends on the size of the share and other conditions. On average, this discount is about 35-50%. Read more about calculating the discount when valuing a share in an apartment...
A slightly different situation arises when one shared owner buys out a share in an apartment from another shared owner of the same apartment. Here, it is advisable for the owners to proceed from the fair value of the share, that is, the value of the share should be calculated in direct proportion to the size of this share. Returning to the example above, the fair value of a 1/2 share in an apartment would be equal to exactly half the market value of the apartment. Only with this approach will both share owners (the one who sells his share and the one who buys) be on equal terms. However, such a fair approach is only possible with the mutual consent of the share owners. Since the concept of “fair value” is absent in the law, in this case an independent appraiser evaluates the market value of the apartment as a whole, and then the shared owners themselves divide the market value of the apartment in proportion to their shares. If one of the owners disagrees with this method of calculation, he may demand that the market value of the share be determined (which often happens in practice).
Calculation formula
All these factors together influence the coefficient, which will almost always be decreasing (from 0.5 to 0.7), with the exception of the situation when the entire apartment is divided into two shares, when, in addition to the owners, no one else is registered in the living space, there are among the owners there are no minors, there is a separate entrance to the room and all the amenities listed in the points above.
Only an experienced real estate appraiser can say for sure which coefficient to choose. And any realtor usually comes up with this figure out of his head based on approximate price tags for real estate in a given residential area and based on his own financial interests.
The formula for calculating the real value of a share looks like this: Sq×D/2×K. The decoding of the variables in this formula is as follows:
- D is the area of the apartment share;
- SCR - the current average market value of one square meter of living space;
- K - decreasing or increasing coefficient.
Certain variations of this formula can be used in various online calculators to calculate the value of real estate. They only give approximate costs. Since webmasters program such calculators based on the recommendations and personal preferences of realtors. If the calculator is located on the website of a real estate agency, it can also produce obviously profitable figures for this organization. But not for you.
Services for assessing shares in an apartment
Our company has been providing qualified professional housing assessment services in Moscow and the Moscow region for more than 20 years
. We conduct both mandatory and proactive assessments.
From a procedural point of view, the assessment of a share in an apartment is practically no different from the assessment of an apartment, therefore all the general requirements, the procedure for concluding an agreement, the deadlines for execution and the composition of the necessary documents are the same in these cases. See more about the procedure for appraising an apartment...
If necessary, we can issue the assessment result in English
- both in the form of an information letter and in the form of a full assessment report. Read more about preparing a valuation report in English... Read more about property valuation for the embassy when obtaining a visa...
Please check with our employees by phone for all conditions for the provision of services for assessing a share in an apartment.
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You can also receive information about the timing and cost of the assessment by sending
What documents are needed to evaluate an apartment or room in a communal apartment?
- Passport of the customer of the assessment.
- Certificate of state registration of rights or extract from the Unified State Register of Real Estate.*
- The document providing the basis for the purchase of housing, indicated in the certificate of registration of title or in the USRN extract.**
- Technical passport (or extract from the technical passport) of the BTI, including an explanation and a floor plan.
* If the housing is located in a new building and there is no certificate of state registration of rights, the assessment of the apartment in the new building is carried out on the basis of an agreement for shared participation in construction.
** This can be a purchase and sale agreement, an agreement of shared participation in construction, a gift agreement, etc.
To evaluate an apartment, it is enough to provide copies of documents or send scanned pages by email.
Missing documents? No problem! Call us for a consultation: +7 495 22-777-92
Why is market share assessment needed?
Carrying out audit activities will allow the company's management to determine the future prospects of its financial activities. Thanks to competent marketing research, professionals will identify the level of competitiveness of the enterprise. Correctly defining a market segment makes it possible to:
- increase the efficiency of pricing policy;
- develop methods of sales promotion;
- determine the effectiveness of the organization;
- identify the right directions for product promotion;
- reduce production costs;
- predict the development prospects of the company;
- enter new markets;
- produce larger packages.
Is it possible to sell a child’s share in an apartment?
Yes, you can, for this you need to obtain the consent of the guardianship and trusteeship authority. In this case, in exchange for the alienated share, the child must receive an equivalent share in another residential area, otherwise the guardianship will not give permission for the transaction. It is not necessary to carry out both transactions of sale and transfer of property to a minor through purchase and sale. An option is possible in which the minor’s share is sold, and he receives an equal share as a gift. The task of guardianship is to ensure that the minor is not left without property, his share is not reduced, and conditions do not worsen.
Transactions involving guardianship and trusteeship authorities are always difficult and time-consuming. On average, it takes the guardianship authorities 1-1.5 months to consider the application. At the same time, guardianship does not always make a positive decision. If they do not give permission for the transaction, there is only one way out - to go to court, but this is a very slow process. On average, the consideration of a case takes 6 months. Whether the buyer will wait that long is a big question.
How is an apartment or room assessed?
The appraisal of an apartment, regardless of its location, be it in St. Petersburg, the Moscow region, or Rostov-on-Don, takes place in several stages.
Stage No. 1. An assessment agreement is drawn up between the customer and the assessment company, which indicates the fixed cost of the apartment assessment service.
Stage No. 2. The information necessary for the assessment is collected and analyzed. This stage includes the provision of all necessary documents, as well as a visit to inspect the property, during which a specialist considers all factors affecting the cost (transport accessibility, infrastructure, location, etc.), and checks the compliance of the layout with the BTI plan. Appraising an apartment without an appraiser visiting is also quite possible; for detailed information about this service, call us at the phone number listed at the top of the site.
Stage No. 3. Calculation of the cost of the apartment. At this stage, the specialist analyzes the market and trends, collects information on sales of similar objects and makes a direct calculation of the cost.
In the practice of assessing housing and assessing the market value of rental apartments, the most common method used is the sales comparison method (comparative approach). The essence of the method is to select similar objects that are sold on the market. After all, the cost largely depends on the market – supply and demand. However, it is not always possible to select an absolutely similar analogue object. For example, the object being assessed is located near the metro, and the analogue is located in the distance. In this case, in order to evaluate the apartment, it is necessary to calculate how the difference in transport accessibility affects the cost and apply the appropriate coefficient.
Then, based on the information received, appraisers calculate the market value and prepare a report on the appraisal of the apartment. Based on the value of the property calculated in the report, certain management decisions are made. And in the case of a mortgage, the bank makes a decision on issuing a loan and its amount.
Stage No. 4. Next, the assessment report is sent to the client in electronic form. And after reading the electronic version, 2 copies are delivered to the customer or to the bank.
If you need an apartment assessment to register your property, contact our consultants. We will tell you about all the nuances of appraising an apartment and the price of this service.
You can order a market valuation of an apartment in St. Petersburg and Moscow not only in our offices, but also online or by phone. Our offices are located in city centers, so an independent assessment of the cost of an apartment in St. Petersburg and Moscow will not require payment for the appraiser’s travel services, and the assessment will be carried out in a short time.
Valuation of the share in the apartment
In addition to individual housing or rooms in communal apartments, there may also be a share of the apartment in the property. This is how situations occur when a home has several owners. The share, like the room, can be sold on the open market, exchanged or used as collateral. To carry out such transactions, the value of the share in the apartment must be assessed.
However, when assessing a share in an apartment for sale, there are specifics:
- When assessing shared ownership of an apartment, it is important to take into account that the market value per square meter of the share is not equal to the unit cost per square meter of the whole apartment. This happens due to the fact that the liquidity of the market share is much lower, so the sale occurs at a significant discount. When assessing a share in an apartment in Moscow, St. Petersburg and other cities, such a discount ranges from 30 to 50%;
- if an independent assessment of a share in an apartment occurs for the purpose of redemption by another shared owner, the property is divided and the share in the apartment is assessed for the court, or the share of the apartment is subject to assessment for inheritance, then in this case the discount is also applied;
- if the assessment of the market value of the share is carried out for the guardianship authorities, then such an assessment may be carried out under the supervision of the state guardianship authorities;
The list of necessary documents to determine the value of a share is no different from the list required to evaluate an entire apartment.
Is it possible to buy out a neighbor's share against his will?
It is possible to buy out a share against the will of a neighbor, but only if this share is insignificant (1/8, 1/10, 1/32, 1/50, etc.), the owner does not live there and it cannot be allocated in kind .
For example, in a two-room apartment there are two owners. One has a 7/8 share, the other 1/8. Provided that the owner of the smaller share does not live there and has no interest in the property, you can go to court and demand that the co-owner be forced to sell his share at the market price. To do this, it is necessary to make an assessment of this share and deposit the entire amount with the court. This practice is not uncommon. Courts are willing to give permission for the redemption of insignificant shares, because in reality, an insignificant share is of no benefit either to the owner or to his co-owner, who cannot fully manage his property.
What is the procedure for performing online share valuation?
First you need to choose an audit organization, paying attention to customer reviews and the availability of documents confirming the knowledge of employees. After this, the customer enters into an agreement with the company.
Assessment requires providing specialists with:
- financial statements;
- business plan;
- information on production volumes.
After receiving the papers, the appraiser conducts a detailed analysis of them. Next, the auditor prepares a report, which he transmits to the client after the examination.
Main stages of work
The first thing appraisers usually start with is offering all home owners to sell it entirely, and then simply divide the funds received. This option should rightfully be considered the most profitable for all owners, when the price of each share is calculated based on the total cost.
For situations where it is not possible to reach a reasonable compromise, it is important to resolve the issue amicably through negotiations with the other parties to the transaction.
Well, the last option is to contact a lawyer. These could be realtors, professional appraisers, or center specialists. They evaluate the share in the apartment by analyzing similar proposals, applying a correction factor. The latter depend on a number of factors, among which the main ones are:
- total area;
- number of rooms available;
- urgency;
- presence of debts and other encumbrances;
- minors registered in the apartment, other issues.
Quite often there are situations when owners seek to save money by trying to resolve the issue on their own. And here it is extremely important to take into account one circumstance - the cost of the share that is purchased by a third party who is not the owner will be at least 1/3 lower than the market value. Therefore, the optimal option is to reach a preliminary agreement on the procedure for using housing. This may be an agreement or the allocation of a share in kind (as a specific room) by going to court.
The final cost of the allocated share depends on how loyal all participants in the process will be, which is also significantly influenced by the location of the apartment, number of storeys, type of building, its layout, as well as many other equally important factors.
