What is the point of these estimates?

This has been a annoying me for a while now. What is the point of these estimates? To make you feel like you overpaid? High confidence taking into consideration what the property sold for 6 months earlier? Even ten years ago it sold for more than their lower price range.

 

These figures are based on an algorithm, so it may be a case of garbage in/garbage out.

No inspection or physical being has put their 2 cents into the numbers, compared the property with reality it is simply a plug and play WFG as to what the property may be worth (if the sun is shining but not too hot, the glare isn't in your eyes, the wind is cool on your back, perspiration will evaporate at a comfortable rate, the traffic noise isn't too bad, there are lots/few interested parties, those parties all have short arms and deep pockets, the punters can raise their eyes from their phones for more than a few seconds etc).

If you want a more realistic answer, get a market appraisal or fork out for a paid valuation.

 

As above, I don't even look at that statistic. Based on median stats which is a guide..

Want to know the value of a house? Market appraisals from agents are somewhat better.. and some good agents get it pretty close.

Then a valuer who's role is to just value

 

Or if you are buying use it as a tool of research for your low ball offer

 

Unfortunately the results aren't consistently high or low.

 

I’m not looking at these figures for any purpose. That low ball offer was a joke, sorry!

I was just curious if there was any logic to the estimates. I’m guessing they are doing it like this. - 30yr old suburb with majority of homes Totally unrenovated. 80% of sales in suburb are this product. Computer generates a figure. Therefore partly renovated or fully renovated homes are totally incorrect. That’s my guess but as you have all said the estimate is not a good source.
And there low confidence and high confidence means nothing also,

 

The more recent the sale, the more useful these guesses may be. They just work on sold prices with no regard to renovations or improvement costs.

That is why suburbs being gentrified usually rate high on the “most improved” value suburbs - these sites simply compare sale price to sale price, ignoring a possible $200K+ update.

 

Recently in Sydney's Lower North Shore, when searching for a property, I found these figures to be typical around $100k lower than what the property actually goes for.

Seems like the estimate would be much more accurate if it were simply the last sold price plus / minus the % increase / decrease for the relevant suburb since the last sale.

 

Yes, that’s what totally confused me also with recent sales