Online property valuations – are they worth using?
Online valuations are a computer-based estimation with no detailed knowledge of the specifics of the property but can be a good starting point for owners – you can get a rough price range instantly and for free from the comfort of your sofa without having to talk to anyone. They can also be helpful for buyers to compare sold prices vs currently available homes. However, you might need to take into account the three main problems with these helpful robots;
- Each website uses its own algorithm AND often different data sets to generate the value so estimates can vary wildly from site to site.
- Time lag – it will take on average 3 – 6 months for recent completions to appear on the Land Registry database and be fed out to various property websites so any “recent” sales listed online will be at least this out of date at any stage. In a fast moving market, this can cause serious issues.
- Lack of context – automated valuation tools have no idea what changes have been made to a property since the last purchase so any refurbishment, layout changes, extensions and so on will pass without notice.
To give you an idea of the range of results possible for sellers via online valuation tools, I’ve just valued my own house via five different national websites. The results showed a value range over £100,000 from highest to lowest estimate.
As to whether they help buyers, we recently conducted viewings on a house at No38 where a potential buyer cited No43 as the most recently sold property on the road. The difference in price was approx. 50k so understandably the buyer was questioning the asking price of No38. However, there were two issues with the information they had found;
- No38 was in immaculate order , had a long 70ft garden and two parking spaces. No43 in comparison was dated, had no central heating, a 30ft garden and no parking off road.
- There had been two more recent completions on the road which had not yet made it to the Land Registry– both were sold after multiple offers for +8% more than No38 and were more comparable in size, condition and amenities
Online valuation tools may be popular partly because they are free but so are most estate agent market appraisals. If you would rather have more accurate opinions, asking an estate agent or surveyor for a market appraisal will get you realistic and justifiable advice in regard to the likely selling price based on best professional judgment. Any figures provided should reflect current market conditions and should be supported with comparables of similar properties in similar situations.
