Estimated value difference between Domain and Realestate.com.au

Hi PCers,

I recently found the estimated value of a property differs quite significantly between that of Domain and Realestate.com.au. Domain: $475-615k vs. Realestate: $900K - 1.15M.

What would be the reason for this? Would it be they are using different methods on estimation so for some properties the difference is more significant?

Any wisdom or explanation? Thanks...

 

RE.com and Domain are guides, if they take different comparable's that could be the reason.

Ask a real-estate agent for their estimate based on the current market conditions etc.

 

I don’t know for sure. But if they are using their own data then REA will have a lot more comparable sales as they have more listings.

 

Could be the data is wrong on 1 of them. Same thing has happened to my father's investment with 1 being 250k more than the other. Problem was the sqm was off making it over calculated on REA.

 

They use black magic and a random number generator.

Neither should be taken any more seriously than the horoscope in either newspaper.

Both are pushed out by algorithms without consideration of many attributes specific to your property.

If you want a appraisal, ask an agent.

If you require a valuation, engage a valuer.

If you want an opinion, ask a taxi driver.

 

I agree professional opinions are most valuable, but in this day and age, information is open and I would have thought access to sales data and to profile properties by characteristics is easily done by a machine. So the RE and Domain systems, if set up correctly, should not be significantly different from what an expert can do. Nowadays, we even have AI to carry out medical diagnosis. Of course if they are random number generators or these systems were set up when dinosaurs roamed the world, then it would be a different story...

 

Domain and RE are delayed in there valuations, and wont actually be able to gauge interest or if a market is moving, its historical data, say like looking at stars for a vague analogy.

 

The experts do not simply rely on sales data, analysis takes in physical aspects of the site, experience and market sentiment amongst other factors. AI hasn't gone that far.

 

Both realestate.com.au and domain give wildly wrong estimates. As an example, I own 2 identical units next door to each other, they even share a wall. realestate.com.au tells me 1 is 40k more expensive than the other.

 

I think PCers are the best. So far the guesses by PCers I have gauged have been very close to the sales outcomes. Of course some are better than others

 

Definitely take them with a grain of salt. I own an apartment and there is virtually an identical next door (both 1 bed, 1 bath (with separate powder) and 1 car space). Both have walk in robes and similar north aspects. The one next door is around 10sqm smaller than mine.
Mine has a REA value of $715k. Domain says $710k.
The one next door has an REA value of $852k. Domain says $685k.

 

Yeah they are generally pretty rubbish estimates..

That said, I do wonder if people use them when considering putting in an offer, and what impact that might have on actual sales

I'm thinking it doesn't really have much impact at all though.. an even lesser effect than say listing price..

 

Fortunately for most vendors, they are guided by their agents and the appraisals that they procured when going to market, as to the value of their property (even if they agents simply want to close a deal).

Conversely, better buying opportunities can exist where there is no agent involvement, poor research skills, a disinterested agent or one from out of area.

 

I have noticed that Domain has values that gyrate less wildly than realestate.com, and i think there are different inputs. So if a place sells well nearby, realestate.com seems to react more sharply, and domain seems to be more sluggish. Both struggle where a property doesn't have a sales history (never been sold).

Don't believe the nonsense about getting agents etc. they are full of BS.

I think if you take the bottom of the range from RE.com and domain, and the top, apply a bit of a bell curve, then you get a reasonable estimate. If something seems outlandishly out it probably is - so exclude that as an outlier.

I recently got a valuation ordered from a bank that was ludicrous. So they order another one where the valuer turns up and does a real valuation. I am still expecting this one to be ludicrous cos there has been a single low value sale in the area. which 'sold very fast' which i think means sold to a mate of the agent at a low price.

Someone mentioned taxi driver, and opinion - sometimes the unbiased one is the observer with no vested interest.

 

Yes, agreed. Even the banks sometimes have their agendas depending how much they want to lend you (?). Of course the best indicators (yet) are the sales prices of a near identical property as #12 said. But even that is taken with a grain of salt. Eg., high vs. low side of the road, shape of the block, etc.

I have found the inaccuracy comes worst when you have an old property, say 1940s, with a large land component. The estimates used is a two beds, 1 bath property. It got worse because there are a lot of subdivisions happened so the 2-bed, 1-bath are units, say, 3 on a block. Anyway, thought just to share the experience.

 

Funny enough if a taxi driver is interested in property they give some really good insights!

 

I'm looking at a few properties with what I believe have unrealistic asking prices. Been on the market for over 6months. Asking price 970k for one of them but domain and realestate.com have them at around the 650k to 900k

For sure the real estate agent told me yea yea it's worth 970k but I definately want another opinion as there job is to sell the house at the highest possible price.

Problem is nothing similar to this particular property in the area to compare it with but I think a fare price would be low 800s.

Will need to engage a valuer I suppose? or get a taxi out there

 

Talk to the other real estate agents in the area - they should be able to guide you on this and other issues. They would be familiar with most of the properties in the area, they would have missed out on the sale for the one you are interested in buying. They have already done their research and could give some insight.