Ever wondered what your property is worth in today’s market? Thinking of selling and want to get an idea of what price you might be able to fetch?
There’s now an easy way to get an estimated value for your property.
We generate an estimated value for residential properties on realestate.com.au using a cutting-edge automated valuation model (AVM).
Combining advanced predictive modelling with unique proprietary data and industry expertise, our valuation tool delivers estimates for more than 80% of residential properties in Australia.
But how does it work, exactly? Here, we answer that important question and more.
There are different ways to value a property, including an agent appraisal, a bank valuation and other desktop and automated valuations.
At realestate.com.au we use many different data points and algorithms to automate a value estimate for the local market.
To calculate a property’s value, we analyse a whole suite of data, including;
We also overlay data from realestate.com.au databases, government bodies and other sources – pinpointing the value of a home by looking at all of its components – land plus building.
The valuation tool relies on a richness of data to give the best estimate of what your property is worth, so the more data that’s available for the calculation the better.
Often an estimate may be too low or high for a property because of the uniqueness of that property or the lack of similar sales in the area to compare it to.
If you live in a tightly-held suburb, it’s likely there are no comparable properties in the area with a recent sales price. And if you live in a newly established suburb, there may not be enough data on property types and sales to give an estimate.
Differences in valuations can happen in the following circumstances:
Banks use a range of estimation methods to value a home for lending purposes, which could include other AVMs.
Banks also often get traditional site inspection valuations or a mixture of these methods. So it’s possible for the two estimates to vary.
realestate.com.au provides a “level of comfort” rating with every estimated value.
A high confidence estimate indicates that there are a number of relevant data points to draw on to calculate the estimated property value. This is likely to include recent sales of similar properties, the correct room configuration and detailed recent and historic market trends for the area.
The richer the data available for the calculation, the more confident you can be in the price estimate.
A medium confidence estimate means that the available data is not as extensive as that needed for a high confidence estimate. It could be that there have been fewer recent sales of similar properties in your area, so the automation tool can’t accurately compare your home to others.
Or it may be that there are other data points missing, such as land size or room configuration, which means the AVM calculates a potentially more conservative price estimate.
Don’t despair if your property returns a low confidence price estimate – there are a number of reasons why this can happen.
If you own a unique property that’s completely unlike any other in your neighbourhood, then the AVM will be unable to input sales data from similar properties.
Likewise, if you live in a tightly-held area with a low amount of sales data, then there is less information available to estimate your property’s value. A low confidence estimate usually indicates lower availability of data and is not a reflection on your individual property.
The more information about the home the better. If your home has been significantly renovated, with additional rooms added then it’s best to let us know.
Start by tracking your property and then request to edit the property details in the ‘My Property Dashboard’. Once we have all the data at hand, we can input it for a revised calculation.
ear in mind that realestate.com.au’s AVM updates the price estimate when significant changes, like the number of bedrooms, are made.
Currently, the AVM does not take into account more complex factors, such as the quality or condition of a property, or cosmetic enhancements such as painting or landscaping.
It takes time for the new data to be processed through the data base, and then used to calculate a new estimated property price. Calculations for the AVM are not live, but are calculated monthly based on the latest market data.
If, after a time, you find the AVM has still not changed there could be other factors at play. It is most likely the adjustments you made to your property are not significant enough to change the price estimate.
If you’re thinking of selling your home, it pays to talk to a local real estate agent who can give you an appraisal on your property, advise on the current market conditions in your area and detail the best approach for a selling campaign for your home.