I'm in the final stages of a transaction to acquire a partnership stake of a business. Tax counsel is advising that the transaction price is too low. Tax counsel recommended a formal business appraisal after referencing last year's company profits (excluding owner/operator's full time salary). I'm building my own model for the valuation -- am curious if there are considerations I'm missing for deciding on transaction price.

I think I'm paying fair price if I include the seller's full time salary as owner operator and the business risks in the operating model. I'm curious if I'm missing anything by skipping a professional business appraisal. E,g. is there any effect on a future sale transaction? Is the professional appraisal required? Since this is a transaction between third parties, price is valid as long as it's agreed on by both buyer and seller, correct?