What is the point of these estimates?

Discussion in 'The Buying & Selling Process' started by Propin, 29th Feb, 2020.

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  1. Propin

    Propin Well-Known Member

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    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.
     

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  2. Scott No Mates

    Scott No Mates Well-Known Member

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    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.
     
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  3. Thomacino

    Thomacino Well-Known Member

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    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
     
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  4. The Y-man

    The Y-man Moderator Staff Member

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    Depends what you are using the estimates for.

    If you are using them to estimate your net worth, you should always use the most optimistic figure to make you feel better.

    The Y-man
     
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  5. Propin

    Propin Well-Known Member

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    Or if you are buying use it as a tool of research for your low ball offer
     
  6. Scott No Mates

    Scott No Mates Well-Known Member

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    Unfortunately the results aren't consistently high or low.
     
    Last edited: 29th Feb, 2020
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  7. The Y-man

    The Y-man Moderator Staff Member

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    For that I get a "proper" report from my broker.

    The Y-man
     
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  8. Propin

    Propin Well-Known Member

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    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,
     
  9. Marg4000

    Marg4000 Well-Known Member

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    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.
     
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  10. StaticSteve

    StaticSteve New Member

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    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.
     
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  11. Propin

    Propin Well-Known Member

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    Yes, that’s what totally confused me also with recent sales
     
  12. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    They are ONE tool, and like all data need to have appropriate considerations for use.

    IN a warm to hot market, stale ( often 120 ++ days old) Stat based data isnt that useful per se

    ta
    rolf