- Different websites put a wide range of values on the same property, and can be way off the mark when compared to licensed valuations and actual sale prices.
- The reports can provide useful information and guidelines, but you can't rely on their price estimations as a substantial number are wrong, and you don't know which ones.
Websites that offer automated property valuations often use emotive language to sell their services. "Before you buy or sell property, find out its real value from the pros." "Get a current market price estimate as used by some of Australia's largest financial institutions." "Eliminate the guesswork."
There's no doubting the appeal of such statements. Home buyers know it's vital to determine a property's value before making an offer. For sellers, getting an accurate market value is just as important. Estate agents' price appraisals should be taken with a large pinch of salt, because they might be overpricing to get the contract, or underpricing for a quick and easy sale.
So where can you turn? The obvious answer is to an independent licensed valuer, but for some, the $400+ fee can be too pricey. Enter automated (or computer-generated) property reports. Pay $40 to $80 and seconds later you get an email with a report and price estimation for almost any property in Australia.
But what information do these reports include and how accurate are their prices?
Please note: this information was current as of February 2008 but is still a useful guide to today's market.
The main players
Some of the most popular websites for e-valuations are:
Run by Australian Property Monitors, this service is owned by Fairfax and promoted through its Domain property website.
Residex claims to have the most comprehensive historical sales and property details data.
RP Data is 38% owned by First American Corporation, which claims its system automatically revalues every US property every day. RP Data claims its system revalues most Australian properties weekly, allowing property owners and investors to value their portfolio.
- If you want to increase your market knowledge, there's no doubt e-valuations can be useful. They might even provide an accurate price estimate or value to guide you, or to use as bargaining tool when dealing with agents, buyers and sellers.
- The problem is, though, you'll never know whether the estimate you're using is one of the more accurate ones or not. There's a proportion of inaccuracies with all of these websites.
- Without third-party verification of their price estimates, or a comparison against real valuations and sale prices, choosing a website is a bit of a lottery. So use the websites to gather information and aid your research, but don't expect a number you can rely on.