Portfolio managers are generally expected to obtain at least three quotations for the body corporate prior to appointing a valuations service provider. While this practice favours the idea of good governance, it is time-consuming and complicates the portfolio manager’s job tremendously.
The properties are compared by erf size, number of bedrooms, number of bathrooms and quality class. Needless to say, this automated mass valuation method cannot take into account factors that require a keen (human) eye, such as state of repair, specific design, etc. This often leaves the accuracy of such valuations in doubt.
In valuing the contents, most asset management specialists will consult annual guide books to estimate the value of an item or similar item. To achieve a higher degree of accuracy, we (Mirfin) research the open market for the replacement cost of each exact item or its successor. In the case of unique items where we are unable to source a price, we will agree with the insured on a suitable value.
If you ask any homeowner to estimate the current value of their home contents, the chances are that they will underestimate the total value by more than 50%. The insured party need to spend some time creating a detailed list of all their assets and then research its current replacement cost.
A property’s replacement value cannot be determined by an estate agent. Only a qualified and experienced professional valuer can determine the value at which your property must be insured to ensure sufficient cover.