Online Valuations vs professional APPRAIsALS
The Residential Sales Team are finding more and more clients talking to them about the free online property valuations that several websites are now providing. While the Sales Team think it is great that more people are taking an active interest in the value of their property, they do strongly advise against relying solely on these free online valuation tools, with most experts agreeing that they should be treated as a guide only.
McDonald Real Estate General Manager, Daniel McDonald, says they are actually causing quite a lot of confusion in the market.
“It’s scary to think that some vendors are basing the value of their biggest asset on a calculation made without an expert setting foot on their property. Or considering the unique features of the home which haven't been taken into account with the online valuations. The problem with calculating house values using algorithms alone is that they cannot account for human emotion, which is a massive part of the house buying process.”
People often tell us they fell in love with a view, the indoor/outdoor flow, or a kitchen layout and we are yet to see an online valuation that is capable of considering these features.
It is generally accepted in the real estate industry that for the most accurate and reliable property valuation a registered valuer should be employed. A registered valuer completes years of study in the skill of property valuation and will use that knowledge, as well as their own insights, to determine an estimated value for a property. Their opinion is heavily relied upon by banks and lending providers. A licenced salesperson can conduct a property valuation, using the same methods adopted by a registered valuer and with access to the same comparable sales data, but this is done at no cost.
The McDonald Real Estate team are highly skilled in the art of appraising properties and are constantly reviewing their appraisal documents and improving their accuracy. They are more than happy to complete free market assessments for homeowners across Taranaki.
One form of valuation that is being less and less relied upon is the Rateable Value (often also referred to as Capital Value or Government Value). The Rateable Value is the valuation developed for local authorities so that council rates can be evenly distributed. They are reviewed only every 3 years, and it is unlikely that a Valuer will set foot on your property to determine your Rateable Value.
Thomas Watt from the McDonald Real Estate New Plymouth team is currently achieving an average sale price 16.9% above Rateable Value.
Even though the online valuation tools give you a great insight into how much your property may be worth, it is important to remember that they can't give you the insights a trained and experienced agent can, before listing your home. The average ranges used in most of these online valuations are 20% or more, which is far too wide to be considered a professional opinion.
Whether you are buying or selling, don't soley rely on an online valuation website to tell you the value of the property.