Property, municipal and market jargon
As a property owner, did you know that the amount of property rates charged on your municipal account is directly linked to the municipal valuation figure reflecting on your rates and taxes statement? This amount is known as the “municipal valuation figure”. It is based, amongst other factors, on the valuation formulae of your municipality’s valuation policy as well as the Municipal Property Rates Act 6 of 2004. However, often times this figure is not in accordance with the actual market value of your property. Consequently, this figure would not be a realistic indication of the potential price of your property.
As for your property insurance, the replacement value - simply put - this refers to the cost of replacing the same good or the same property in today’s value. Meaning, the amount it will cost to rebuild your property; in the unfortunate event that it is completely destroyed, today. In some instances, this amount does not take into consideration the land value.
And finally, the market value. This is clearly defined as the price that an average consumer is willing and able to pay for a good or for your property, at a given point in time. This amount is inclusive of the land value as well as the fittings and fixtures in and on the property. It is driven by the demand and supply of similar properties on the market at that time. The best way to achieve great results in determining the market value, would be to make use of the Sales Comparison Approach (SCA), which serves as a guide in deriving the most suitable market pricing of the property. This is used to compare one property with other recently sold properties of similar characteristics, within the same geographic area. We like to say, “let’s compare apples with apples”, and when we do that; we will get a clearer picture of what you have. Or perhaps, the reason why your property is not getting sold within a reasonable time.
Lerato M Real Estate Property Practitioners are always available to advise and guide you through your selling journey. We’re just a phone call away, or you can just visit our nearest office within your township.