Auto price valuations or estimates are becoming quite common. Their widespread use on sites like realestate.com.au (REA), realestateview, Domain and even CoreLogic give the impression of providing reliable advice. It isn’t.
Whilst a useful tool to provide a very broad estimate where you have no idea of value, make no mistake; they can be quite inaccurate. As a tool, they are primarily directed at engaging consumers with their site by providing “useful” information or using the engagement to extract useful information from the consumer.
Take the example of a local property recently observed with an estimate of $1,490,000 (range $1.38 – 1.62 million) on REA, with the figure being $1,800,000 (range $1.55 – 2.05 million) on Domain. So, a difference of 21% on the price estimated and a range of $670,000 between the top and bottom figures in the range.
Unfortunately, many consumers are inclined to think these genuinely indicate the current value of their property. Even worse, some banks use such indicators to conduct “desktop” valuations and advise their clients of their current “value”, leading to them concluding that the bank has completed a valuation at this price.
Even Councils get their automated valuations wrong, which is why ratepayers are entitled to object and seek a review (by an actual person inspecting the property – a valuer).
So, use them as a fun tool, but if you need to establish what your property can likely be sold for, seek advice from a valuer or an agent, who will consider the actual features of your specific property by a physical inspection.