Consumer valuation websites have been a game-changer for buyers and sellers to first determine whether properties for sale are in their ballpark, however, while these sites contain lots of useful property information around a certain property they do not factor in the individual qualities of each home and rely on third-party data to build their algorithm, including relying on real estate agents to ‘claim a sale’.
Here are some key points to consider when utilising these websites:
1. Estimated Selling Ranges for a particular property are best determined upon a physical viewing
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- When determining how much you should pay for the biggest asset you will ever buy, there is nothing like speaking to the agents who will know that property inside and out. Most agents will let you know after a week of open homes what market feedback.
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- By viewing the property yourself, you will get the best feel of the home and you will determine where you see the value.
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- Comparable Sales over the past 3 months provide Vendors with a guide as to where buyers may see the value but in this current market environment, buyers are in control and it is up to the agent and your feedback to adjust their expectations week after week.
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- You can learn local real estate values better than any computer program by undertaking your own market research, asking for recent sales information in the area and digging into how many days on market it took for them to sell.
2. There are some things computers can’t measure.
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- Algorithms cannot take into account the condition of the property and other critical factors that influence the value.
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- It is our obligation to share any disclosures around unconsented works, etc which may have an effect on the selling range.
3. No two houses are the same.
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- If you are comparing apartments or terraced houses with other similar properties, then values may be easy to estimate. But, in an area with standalone properties of varying ages, that have had extensive renovations over the years, it’s harder to compare apples with apples.
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- Variables like school zones, positioning, zoning, and floor plans – all generate a wide possible value range for each and every property depending on the type of buyer
4. Should you rely on the Rateable Value as a guide?
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- It felt like it was just yesterday that the new CVs were released, doesn’t it? Everyone felt pleasantly surprised (and some disappointed) that this was the true value of their home.
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- I spend a lot of time looking at what the Sale Price to C.V Ratio is for any new or existing clients when looking at recommendations per suburb, per property however these were based on 2021 data and will have another release in 2 years which are predicted to drop.
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- Ask me for your suburbs’ recent sales ratio now and you can watch this over time but if buyers are referring to the C.V whilst it is at a high then they will assume that is the value, therefore a good time to capitalise off the back of this before its too late.
5. The market moves quickly.
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- In this digital age and where we are influenced/distracted by all forms of media, albeit social media or otherwise; there is a swell in public opinion that moves the market quickly.
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- This shift in perception is not reflected in consumers’ property sites, therefore, provides a huge guessing game depending on the individual viewing it.
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- As REINZ has shifted the release of sales data from ‘Sold’ to ‘Settled’, this also means that the prices you are seeing online could be more than 3-6 months out of date.
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- That doesn’t mean you shouldn’t pay attention to what they say, it just means you should keep your eyes on what’s happening right now.
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- Follow up with salespeople and ask what properties you recently visited ended up selling for.
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- Go along to property auctions when you can, even if you aren’t bidding to see what properties are actually selling for today.
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- You can watch our Auctions Live at https://rwremuera.co.nz/auctions-live/ to get a feel for the process as well as what is happening week on week.
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- I can also provide you with our weekly clearance rates and days on market by Selling Method so you can get a true sense of what is happening out there currently.
6. Properties are worth different amounts to different people.
Are you going to live in the home or are you an investor? Do you have family living close by? Is it in a school zone you want to get your kids into? Do you have a deadline to move by?
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- These are all factors that can lead to one buyer being prepared to pay a lot more than another for the same home.
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- If you follow the estimate, you might end up paying too much. Some ranges are grossly over-estimated.
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- The best way to work out what a home is really worth is to find out what similar houses have sold for nearby and decide how they compare to the property you are considering.
In conclusion
The more factual data and information you have, the better.
NZ Property sites are a useful tool, but they are just one part of the bigger picture. It’s important to be aware of the shortcomings and when to bring in the experts in their field to provide you with this data.
I am here to provide any helpful advice whenever you need it, with multiple resources at my fingertips. Contact me on 021 226 5201 for information any tim
