Property valuations – All you need to know | Frequently asked questions

Whether you manage a body corporate property, or you are a freehold property owner, or represent a business, you may be in need of a reliable property valuations company one day.

Mirfin Valuation Services is a leading nationwide provider of property valuations, delivering accurate property valuation reports catering to bodies corporate, individuals, and corporate clients.

Below are some of the frequently asked questions we receive regarding property valuations in general, and Mirfin’s services in particular.

Should you have questions, email us at and let’s explore the best approach for your unique situation.

All you need to know about property valuations.

What’s the difference between Residential and Commercial valuations?

When conducting a market price valuation, the income generated by the property plays a major role in its valuation. This is more applicable to commercial properties than to residential properties.

Regarding replacement cost valuations, the approach for residential properties is very similar to that of commercial properties: we only consider the cost to rebuild a damaged building and remove the resulting rubble, regardless of factors that would influence the property’s market value such as location and income generated.

More answers on residential, commercial and sectional title insurance valuations questions in our frequently asked questions posts:

What is the difference between Market Price Valuation and Replacement Cost (Insurance) Valuation?

Property Market Value is defined as the price at which a property should exchange hands between a willing seller and a willing buyer in an arms-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.
Property Replacement Cost is the actual cost to replace a structure at its pre-loss condition, including the cost of demolition, rubble removal, architectural services, land surveyors and additional building services.

Read more: Why it is wrong to insure the market value of your house

What purposes can market valuations serve?

A market price valuation is useful in the following instances:

  • making an informed marketing, buying or rental decision
  • applying for a mortgage bond
  • appropriating a deceased estate
  • determining fair compensation for land expropriation under the Land Restitution Act
  • dealing with legal settlements, e.g. divorce cases
  • contesting municipal rates and taxes
  • submitting tax declarations
  • establishing an auction reserve price
  • preparing a corporate take-over or merger
  • winding up an insolvency

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Why do I need a professional insurance valuation report?

Compared to a desktop valuation (a simplified property valuation report), a professional valuation determines an accurate replacement (reinstatement) cost of assets or property to ensure adequate coverage in case of an unforeseen event, such as natural disasters, fire damage, or structural failures.

Without a professional valuation report, there's a risk of underinsurance, leading to insufficient coverage and financial loss in the event of a claim, or a risk of overinsurance, leading to unreasonable losses on unnecessary premiums.

For example, if you have been escalating your sum insured by a flat rate of 10% year after year, it is very likely that your buildings are overinsured by 20, 30, or even 50%. A professional insurance valuation can pay for itself within a few months by bringing your sum insured down to its true level.
Read more about mistakes in insurance valuations in our articles:

Will the valuation be kept confidential?

In accordance with our privacy policy, no information pertaining to our clients and their property valuation reports shall be divulged by Mirfin to third parties. Any third parties seeking information or a copy of the valuation report shall be referred to the authorised valuation holder.

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What is the valuation procedure for heritage buildings?

Estimating the replacement cost of a “heritage” building on the assumption that the building will be reinstated using historically correct building materials and artisanship (“old for old”) requires specialised input from the relevant experts. This tends to be a tedious and costly process and can easily amount to a fee of more than 10 times that of a valuation done on the assumption of reinstating the building “old for new”.
Insuring a building on the basis of “old for old” will also have a substantial impact on the payable premium as the building’s replacement cost increases two- or threefold.

Read more: How to determine a building’s insurance value

I have a query about a Mirfin Valuation – what is the procedure?

We encourage our clients to submit any queries by email or via the “Lodge a query” link provided in our survey reports so that all concerns may be addressed in a proper manner and at no additional cost.

Should an in-person consultation with one of our valuers be required, the valuer will contact you to schedule an appointment. In this case, a fee of R950 per hour will be charged, excl. VAT and call-out.

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How often should I update an insurance valuation?

Well, the answer depends on whether this is a residential, a body corporate or a commercial insurance valuation.

If you’re a freehold property owner and want to insure your house or another residential real estate object, you should know that South African legislation doesn't mandate a specific frequency for keeping the insurance valuation updated. But you may be interested in knowing how insurance agents may treat an outdated insurance valuation report and why you may be interested in keeping your house insurance valuations updated at least one time every five years. Read about this in our post.

If you are a body corporate managing agent you should know that the frequency of insurance valuation updates for sectional title schemes is mandated by the Sectional Titles Schemes Management Act, 2011, which stipulates that a valuation of all buildings and improvements covered by insurance must be obtained at least every three years.
Learn more What the sectional title law says about valuations

If you are a business owner you should know that there is no specific legal mandate that outlines the frequency of commercial property valuations. Businesses may need independent property reviews and valuations when they undergo expansions, acquisitions, or substantial alterations in property usage or asset composition. Also, in scenarios where a company secures a bank loan with the property as collateral, the lending institution might stipulate periodic property valuations. These valuations ensure that the property value supports the loan amount, aligning with the lender's risk mitigation strategy and ensuring the property remains adequately insured.

What factors influence an insurance valuation?

An insurance valuation is an estimate of the amount of money that would be required to replace or repair a property or its contents in the event of a loss. Insurance valuations are important for property owners, sectional title schemes, and commercial customers, as they help them determine the appropriate level of insurance coverage and premium.

There are many factors that can influence an insurance valuation, such as: the type and purpose of the property, the location and condition of the property, the quality and quantity of the building materials and construction methods, the age and depreciation of the property, the market value of the property, the contents of the property and many others.

However, not all of these factors are equally relevant or even applicable for all categories of property owners. For example: for freehold property owners, the insurance valuation may not include the value of the land as well as the land improvements, as it is usually not covered by insurance policies while the land or the improvements on the land, such as fences, driveways, or gardens are applicable for sectional title and commercial property owners.

In Mirfin you can order a professional property survey and get a valuation report providing you with a very accurate estimate of your property replacement cost, in case you need an insurance valuation, or market cost, in case you want to buy or sell your property.

Request a free quotation here.

Read more about Mirfin’s low price guarantee

Why is Professional Indemnity cover so important?

Any valuer can have a bad day and make an error that may cause your building to be underinsured. Are you prepared to assume personal liability for following the valuer’s flawed insurance recommendation? Of course not! You need to be able to hold your service provider accountable in the event of a shortfall in claim pay-out. But if your valuer is not adequately insured, the liability will fall back on you.

Mirfin’s professional liability is backed by Professional Indemnity cover of R45 million per event. This is unsurpassed by any competitor and may prove to be a lifesaver in the event of an insurance claim.

Don’t select your valuer purely on the merit of price, rather ensure that they can be held accountable when something goes wrong!

Read More: Trustee liability in the event of underinsurance

Who pays for the property valuation?

While some insurance providers and property managers offer to bear or share the cost of the valuation as part of their value-add service, the policyholder normally bears the cost of a valuation, however, some managing agents, insurance brokers or underwriters may offer to absorb the fee partially or entirely.

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Is the cost of a Mirfin valuation tax deductible?

Yes, as it constitutes an expense on your tax return.

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Does a property valuation price include VAT?

With more than 2 500 sectional title valuations performed annually, Mirfin is obliged to register as a VAT vendor. (In converse, service providers who fall short of the VAT threshold of R1 million turnover per year are unlikely to be highly experienced in valuing community schemes.)

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Does Mirfin operate countrywide?

Our service area extends to all corners of South Africa. Mirfin has valuers permanently based in Johannesburg, Pretoria, Cape Town, Durban, Bloemfontein, Port Elizabeth and East London.

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Does Mirfin’s do physical site inspection?

All of Mirfin’s survey reports are based on a physical site inspection, unless a client specifically requests a “desktop” service.

Read more: How to determine a building’s insurance value

How long will you be on site for?

A site inspection typically takes 15 - 60 minutes, depending on the size and scope of the subject property, as well as the availability of information from the client and/or contact person on site. However, some surveys can also take an entire day where the property is extensive and the buildings spread far apart.

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How long do I have to wait for the valuation results?

The turnaround time depends on the size of the project but, in general, our property/buildings valuation report will be delivered to you by email within 4 - 7 working days from the date of inspection.

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Why does Mirfin have a policy of dealing with client queries strictly in writing only?

It is in the best interest of all parties concerned that service-related queries are submitted in writing, as detailed below:

  • A technical explanation is more practically and accurately shared with other stakeholders in writing than by word of mouth.
  • A written record serves as a point of reference for future trustees and portfolio managers.
  • The property surveyor may not be available to respond immediately due to a usually full daytime schedule.
  • The sheer volume of property surveys conducted daily makes it difficult to respond to verbal queries in a satisfactory manner.
  • Due to the highly competitive business environment, the time and call-out for a post-service meeting is not included in our standard service fees.
  • The financial and legal liability that is inherent to our services necessitates seamless documentation, as is also required by our professional indemnity insurers.
  • Allegations of omissive or incorrect survey reports must be substantiated by the client so that we may duly address them in a professional and detailed manner.
What is "Capitalisation Rate"?

The capitalisation rate is the ratio between the net operating income produced by an asset and its capital cost (the original price paid to buy the asset) or alternatively its current market value, i.e. cap rate = annual net operating income/cost (or value). 

In other words, the cap rate of a property is an assessment of the yield of the property over one year. For example, a property worth R1 million generating R50,000 of NOI (annual net operating income) would have a cap rate of 5%.

The capitalisation rate is best determined by referring to market transactions of comparable properties as it is based on information derived from market analysis. The main influences of the capitalisation rate are interest rate and risk, i.e. the higher the interest rate and the higher the risk, the better the return an investor will require. The risk inherent to income-producing properties reflects the degree of certainty that the expected income will be realised.

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Is Mirfin an independent property valuation company?

Mirfin is a 100% independent and impartial company, we are not contracted or affiliated to any third parties.

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What is the cost of a Mirfin property valuation?

Our property valuation fees are based on the amount of time spent on a valuation, rather than on a percentage of the value of the property. The amount of time required for a survey depends on the size of the subject property, as well as the scope of inspection and research required.

Mirfin guarantees the lowest property valuation price (Learn more here).

This is typically measured by the number of sections, units or stands on a communal property, or by the client's approximate indication of the market value or current sum insured. (We reserve the right to adjust the fee in case the client's indication deviates from our assessed value by more than 10%.)
Our fees are standard for all locations located within a 100 km travelling distance from the centres of Johannesburg, Cape Town, Pretoria, Durban, Nelspruit, Bloemfontein, George and Port Elizabeth. Locations beyond the 100 km radius may attract a travelling surcharge.

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Does Mirfin perform remote valuations (also known as “desktop valuations“)?

Our property valuation fees are based on the amount of time spent on a valuation, rather than on a percentage of the value of the property. The amount of time required for a survey depends on the size of the subject property, as well as the scope of inspection and research required.

Mirfin guarantees the lowest property valuation price (Learn more here).

This is typically measured by the number of sections, units or stands on a communal property, or by the client's approximate indication of the market value or current sum insured. (We reserve the right to adjust the fee in case the client's indication deviates from our assessed value by more than 10%.)
Our fees are standard for all locations located within a 100 km travelling distance from the centres of Johannesburg, Cape Town, Pretoria, Durban, Nelspruit, Bloemfontein, George and Port Elizabeth. Locations beyond the 100 km radius may attract a travelling surcharge.

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Does Mirfin perform remote valuations (also known as “desktop valuations“)?

The qualifications required to become a professional property valuer are stipulated in the Rules for the Property Valuers Profession, 2020, of the Property Valuers Profession Act, 2000.
The first step is to enrol at a tertiary-education institution that is accredited by the South African Council for the Property Valuers Profession (SACPVP) and to register as a Candidate Valuer with the SACPVP. The candidate must complete the prescribed 4-year courses and pass the required examinations with a degree in Real Estate (majoring in Property Valuation).
After having gained workplace experience under the supervision of either a Professional Associated Valuer or a Professional Valuer for a minimum of 2 years, the Candidate Valuer can advance to become a Professional Associated Valuer by taking the required admission examination for professional associated valuers.

To obtain the highest qualification of Professional Property Valuer, the Professional Associated Valuer can apply after a further 2 - 3 years to prove his or her competence, proficiency, and experience by passing the admission examination for professional valuers.

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What is Mirfin’s “Low-Price Guarantee”?

We pledge to beat any price for the same service offering. However, in the event of a reduced fee, Mirfin’s professional liability will be adjusted to that of its direct competitor.
But why put yourself personally at risk for the sake of saving the body corporate a few hundred rand?

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Why choose Mirfin for your property valuation?

Best price guarantee

We will beat any price for the same service offering.

20 years

We are industry pioneers and industry leaders for over 20 years.

600 000 + clients

We’re a South African nationwide property valuation services provider for homeowners, property managers, insurers, brokers & attorneys.

One-click quotations

No time for filling in forms? Just click the button for an instant quote and share it with your clients.

98% service coverage

Our surveyors are situated in the densely populated areas of Johannesburg, Pretoria, Cape Town, Durban, Bloemfontein, Port Elizabeth, East London and Mossel Bay.

17% extra discount

Save on average 17% in premiums for your insurance broker with Mirfin’s property insurance valuation report .

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