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Why Using Online Property Value Estimate is like googling your symptoms

Online property value estimates have been around for several years and continue to be popular among homeowners. These estimates are a convenient and speedy way to obtain an approximate value of your property. However, it is crucial to recognize that online property estimates are just that – estimates. While there is nothing inherently wrong with relying on them, it is essential to remember that they may not provide an accurate or comprehensive valuation of your property.

Fortunately, there are other methods to determine the value of your property. There are three main ways you can go about it.

Let’s explore these options to help you make an informed decision.

1.Online property estimate

An online property estimate, also known as an online property valuation or online property appraisal, is an estimate of a property’s value provided through an online tool or website. These estimates are generated using various data sources, such as recent sales of similar properties in the area, current market trends, and property characteristics such as size, age, and condition.

Real estate websites like realestate, domain, and corelogic typically provide online property estimates. They can be helpful for homeowners, buyers, and sellers who want to get a GENERAL idea of a property’s value. 

Catch with online property estimates. 

Obtaining an online property estimate can be likened to searching for your symptoms on Google; while it can provide a rough indication of what may be occurring, it is advisable to consult a doctor for a more accurate diagnosis.

Real estate agents like us typically do not view online value estimates favorably. In fact, in some cases, they are not worth the paper they are printed on. One of the primary reasons for our skepticism towards these estimates is the wide range they often provide. While online assessments may give a ballpark figure, they can vastly differ from the property’s actual market value. Additionally, these estimates are based on various assumptions about the property, which may only sometimes be accurate.

2.An Appraisal

An appraisal is a property value estimate conducted by a licensed real estate professional. It is a comprehensive and detailed assessment of a property’s value, and it is based on various factors that influence the current market conditions. As licensed professionals, we follow strict guidelines and industry standards when providing an appraisal.

To arrive at a reliable estimate, we consider several critical factors. We assess current listings, which gives us a sense of the competition in the market. We also analyze past sales in the area, giving us insight into similar properties’ historical value. Additionally, we evaluate buyer demand, which can significantly impact a property’s value.

When conducting an agent appraisal, we consider the property’s condition and the quality of its fixtures and fittings. We consider any upgrades or renovations that may have been made and their impact on the property’s value. Additionally, we analyze any factors that may affect the sale of the property, such as its location, zoning, or any potential issues with the title.

If the property is currently tenanted, we evaluate the impact this may have on the property’s value. We assess the tenant’s lease agreement, rent payments, and overall property condition. Moreover, we consider the property’s aspect, views, and noise level, as these can significantly influence the value of the property.

In the case of apartments, we consider additional factors. We evaluate the building grade, reputation among buyers, strata levies, and associated costs. We also consider the size and layout of the apartment, as well as its proximity to local amenities and public transport.

  1. Property Valuation

A property valuation is a comprehensive report that accurately assesses a property’s market value. It is prepared by an accredited valuer who profoundly understands the real estate market and its complexities. Valuations are crucial when an accurate valuation is needed for a property, such as when obtaining finance from a lender, determining a property’s worth for taxation purposes, or settling family or partnership disputes.

In most cases, lenders require a property valuation to ensure that the property is a suitable security for a loan and the market value is sufficient to cover the mortgage in case of default. 

Property valuations are often required for various legal and financial purposes, such as divorce settlements, estate planning, or probate proceedings.

The cost of a property valuation varies depending on the property’s value and the appraisal’s complexity. Generally, valuations range from $200 to $600. However, many lenders offer free property valuations as part of their home loan packages, making it easier for buyers to assess their property’s value accurately.

Here is a sample valuation report: LINK

Sample Property Valuation Report

In conclusion, online property value estimates can be a convenient and quick way to obtain a general idea of a property’s worth, but they should be viewed with caution. The estimates are based on various assumptions and may not always be accurate or comprehensive. For a more reliable assessment, homeowners can consider an appraisal conducted by a licensed real estate professional or a comprehensive property valuation prepared by an accredited valuer.

These methods take into account various critical factors and provide a more detailed and accurate assessment of a property’s market value. Ultimately, homeowners should consider all available options to make an informed decision when assessing their property’s value.

AUTHOR

Joseph Fairchild

Joseph is an awards winning real estate agent, local property economist and thought leader in the property industry. He is well versed in advanced property strategies (such as vendor finance, delayed settlements and back-to-back settlements for off-the-plan properties) which many other agents would place neatly in the ‘too hard’ basket.

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