Are Instant On-Line Property Valuations Any Good?
In years gone by, if you were thinking about selling, and wanted to get an appraisal on your property, you would normally contact your local real estate agent to book an appraisal inspection. Your agent would then compare your property to others that is sold in the area, and give you an approximate range where they thought it might sell. But in the modern age, where technology rules, there has been a sharp rise in the popularity of instant value estimate tools which are found online, and generally free to use.
These instant valuation estimates offer great convenience, and can give you valuable insights into not just the value of your property, but the movements of the local property market in general. They are simple, easy to use, and give you the information you want in seconds, but the question needs to be asked – how accurate are they?
The origins of instant valuation estimates
These websites begin popping up around a decade ago, and were primarily designed as lead generation tools for real estate agents. How better to get homeowners to volunteer their contact details and intentions to sell them by offering a free estimate of value for the property without needing to book a real estate agent appraisal?
In the present day, the intention behind these technologies is much the same, however, the space has been crowded with many different players, and while they all mostly perform the same function, they use varying data sources and offer a varying degrees of reliability.
While they are hardly infallible, they are certainly convenient. Regardless of which hour of day or night, you can normally have one of these estimate reports in your email inbox within five minutes. Alternatively, if you contacted your local real estate agent, it could take several days to book in a time that is suitable for them to come out and inspect, it could then take another several days for them to come back to you with their proposal.
If you aren’t really looking to sell, and are just curious as to what your home’s potential worth might be, they are a great means of getting the information you want without needing to go through the rigmarole of having an agent or valuer out.
The main problem with these online estimates is that they are generated by computer algorithms which are almost completely reliant on there being current and up-to-date information publicly available about your property. If your house has not been listed on the market for sale or rent for many years, then it is unlikely there will be enough information in the public domain to compile an accurate estimate of value. after all, if you bought your house 15 years ago and have since renovated it from top to bottom, how could a computer possibly figure out its value?
The other problem is that these estimates are formulated primarily based on historical sales data, which is OK in a steady and stable market, but can be misleading in a market where prices are fluctuating. If property values are either rising or falling sharply, then sale prices from 3 to 6 months ago are less relevant, and many of these online estimates fail to take this into consideration.
Is it better to get a proper agent appraisal?
A proper and thorough appraisal from your local real estate agent will always be more detailed and reliable than a computer generated estimate. That’s not to say these online estimates aren’t useful, but if you’re thinking about selling, they should be used as a starting point only. Ultimately, your local real estate agent can give you not only a guide of what your home is potentially worth, but tips and advice on how to best present and market the property as well.
To get an accurate analysis of your property’s value and a full assessment of your situation, give us a call or drop us a line today.
Til next time, ciao 😊