Market Price
Valuations
A property priced on the strength of a Mirfin valuation will attract notably less buyer resistance, if any at all. This means that the time span between marketing and obtaining a signed "offer to purchase" will be reduced considerably. Properties which are over-priced will take a long time to sell, if at all. It has been proven time and again that properties which remain unsold for a long period of time will eventually become stigmatised in the sense that potential buyers might become suspicious of the property, which may well result in a sale below market value.
With a Mirfin valuation in hand, you, the seller, will have the peace of mind to grant a sole mandate to your preferred estate agent and strengthen your negotiating leverage with the estate agent. It puts you in charge! A Mirfin valuation is an affordable and very feasible instrument to put your estate agent to the test by asking them to support their sales promises with a professional valuation.
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). 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.
A standard market price valuation by Mirfin includes the following elements, as appropriate for the subject property and purpose of valuation:
- Executive summary
- Property details
- Description of property
- Description of buildings
- Risk & maintenance observations
- Cost calculation
- Analysis of comparable sales
- Analysis of comparable rentals
- Calculation of income capitalisation
- Photographs of the property
- Supporting documents (e.g. map of macro-location, micro-location, building plans, diagrams, title deed information etc.)
- Explanatory information (glossary, valuation methods etc.)
Yes, Mirfin offers a 50% discount on so-called “desktop” valuations where the property is inaccessible, a rough indication of market value will suffice, or when cost is a major concern. It must be noted that a “desktop” valuation is unable to take into account certain factors which may affect the market value, such as the state of repair, environmental concerns etc. Therefore, Mirfin cannot be held liable for any claims arising out of a “desktop” service due to incorrect or absent information which would have otherwise been available to the valuer, had a physical on-site inspection been performed.
Yes, Mirfin can assist with independent and objective market price valuations that are steadfast to the scrutiny of the authorities.
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