Online Valuation tools - good or bad for business?
About a year ago, we tested an Online Valuation Tool on the Bonett’s website www.bonetts.co.uk
We thought that potential clients would use the tool when they saw it on our home page, ‘clicking’ on it, going through the process and getting the ‘valuation’. That’s exactly what they did. The problem came with the way the valuation tool collects data on the property to be valued and comes up with its figure. We had several potential clients less than impressed with what, in the end, seemed like arbitrary values. Clearly these tools trawl prices, property types, locations by post code and so on, to formulate algorithms from which a final figure pops out. But they clearly miss intangibles and special features.
Our problem in Brighton & Hove is that the property types and locations are so discrete that the tool was not subtle or clever enough to match the skill of an actual experienced human valuer in 3-D.
Today, an industry report suggests that in the USA, a prospective seller is in litigation with Zillow, an Online Market Appraisal Tool provider, for a valuation which seems to say her property is c. $80,000 too expensive. The tool is clearly way out but it could mean she cannot achieve the price she expects because of this. Zoopla in the UK does the same thing; suggesting values of properties from held data. Sometimes it is very accurate; other times not at all.
The moral of the story is, don’t rely on online valuation tools as they can be way out on price. Get a proper valuation from a local experienced estate agent and you should be able to rely on that. When we come to value, we start with comparable evidence of nearby sold property on the Land Registry database, BUT this is combined with local knowledge of desirability of the property, the condition and its location, plus who is in the marketplace looking for such property and how much they are spending. The other almost impossible to quantify ‘feeling’ for the value comes into play and cannot be ignored.There’s a lot to consider but the 3-D human should bring a lot to the table to give you confidence on the price suggested.
Paul Bonett F.N.A.E.A. M.A.R.L.A.