Getting a property value estimate is a great first step when you’re first thinking of selling your home. But it’s important to understand what it is, how it’s calculated, and how reliable or accurate it is. There’s a saturation of information around the subject, so here’s what you need to know.
What is a property value estimate?
A property value estimate is an algorithmically generated prediction of your property value. It’s not the definitive value of your property, so it is not for use by banks or insurers. Instead, it’s more a general idea of the price you might get, so you can start thinking about your property sale. Find out more about how the estimate is calculated.
How is it different from a valuation or appraisal?
A property value estimate is not to be confused with a valuation or an appraisal. A valuation is conducted by a certified property valuer, who determines the actual value of your property. This figure is official, so it can then be passed on to banks for home loans or insurers for insurance policies.
An appraisal is conducted by a real estate agent (note: not a certified property valuer). They use their contextual knowledge of the local market and the current amount of buyer interest to provide you with an estimated range of what your property might sell for. Remember, what your property might sell for is not what it is worth, which is what a valuer is trying to determine. Read more about appraisals and what they include.
A property value estimate is unique because it isn’t conducted by a person. It uses data to attempt to predict the sale price of your property and give you an idea of what your home could go for.
What is a reliable Property Value Estimator to use?
Avnu’s Property Value Estimator in our Property Report uses Core Logic’s value estimating algorithm along with their data to predict the sale price of a property. The tool approximates a property’s value based on local market data at a single point in time. It could change at any time in the future as it is based on available data at the time.
Core Logic accumulates the data via public data sources, such as governments, property professionals and other third parties which you can access in their property report as well. Core Logic is Australia and New Zealand’s largest and most trusted property data provider. Their customers include large corporates and government bodies such as the Reserve Bank of Australia.
How is it generated?
The Estimated Value is generated using an Automated Valuation Model (AVM), which is a common tool in the real estate industry. This applies advanced algorithms to large databases to predict a property’s value.
How is it presented?
The Property Value Estimator provides a range of values, which are the upper and lower limits of the value estimated by the algorithm. The algorithm then takes the average of these two limits to give one figure as an estimated value. The breadth of the range can vary a fair amount, depending on the number of comparable home sales and local market data. A wide range can indicate a lack of data or incredible volatility in the data provided.
How do I know if it’s reliable?
Under the estimated value sits the confidence indicator, being either low, medium, or high. It’s based on the probability of the Estimated Value being accurate compared to market value. With more data comes greater confidence and vice versa.
What data is used?
The Property Value Estimator’s algorithm utilises data about the property such as the address, physical attributes, historical sales and local market trends.
To get your Property Value Estimate, go to Avnu’s free property report tool. You’ll be able to find the potential sale price of your property, as well as many more important details. If you want a personalised touch to your estimated property value, get an appraisal from your local Avnu agent. They can take even more factors into account, such as development in your suburb.
DISCLAIMER – The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. LJ Hooker Avnu will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.