What should a professional know in a case study like online property valuation?
- An online property valuation tool can come in handy when you want to get an idea of property prices on the market. It can be done without consulting a real estate professional or hiring an appraiser.
- But if you need a serious valuation , an appraiser, no doubt.
- In large cities, real estate prices can fluctuate considerably between neighboring streets, making assessments based solely on market data difficult.
The internet offers many offers for real estate to be valued in seconds and all for free. This attracts many homeowners who want to know how much the value of the house or apartment has recently increased. Thousands of homeowners evaluate their homes every month but come up with very different results.
The reason for this is the property valuation methods and the data used. The system depends on the web. In some cases it consists of providing a complete data set for the house, including a floor plan and a building plan. Therefore, a visit to the site is not necessary.
On other websites, the zip code of the location of the property, the house or the year of construction is enough. Traditional appraisal calculates differently than online Internet tools and uses other data sources such as official real estate market reports.
In the case of single-family homes, they usually use the material value method, which works with standardized construction costs for certain types of property. The result of the material value method is a market value that should not be confused with the price that can possibly be reached in the market. Therefore, a real estate agent evaluating the same property would normally come to a different conclusion.
Most online property appraisal tools are based on public data and multiple listing services. In some cases, the various sources can be conflicting and complex. In addition, public records may be outdated.
At a superficial level, the valuation you get from these tools can be accurate. However, because the source data may not be reliable, you should not rely on the tool alone. Apart from that, the assessment tools cannot take into account the following:
The historical value of a property: Not all automated valuation models can account for historic homes. So, if your home is the only one with historical value on your street, you may not get an accurate appraisal of your property. In this case, it is best to hire a certified appraiser for your home.
Damage to your property: Even if your home looks good on the outside, leaky pipes and cracks in walls can reduce the value of your property. An online assessment tool will not be able to detect these problems.
Enhanced accessories: If you added a new and unique feature to your home, in most cases, an automated valuation model won’t be able to take into account the effort and time you spend implementing the improvements. As such, you won’t get an accurate estimate of the value of your home.
Therefore, if you are serious about refinancing, buying or selling a property, it is not advisable to rely solely on an online appraisal.
Keep in mind that whatever you plan to do with your home, it’s all about a lot of money. Therefore, you should get the best price possible.