Most buyers interested in buying a property will purchase or get for free from their bank what’s called a Property, or Automated Valuation, Report.
These reports are NOT bank valuations, but computer-generated estimates of the likely value of a home.
Unlike a formal valuation, these reports don’t factor in specifics regarding the location, standard of presentation and renovation, year & type of build, or for multi-residential dwellings the size of a group the property might sit in.
The comparable properties aren’t hand-picked to arrive at an estimation, but randomly chosen by an algorithm. If for example, the property for sale is a 3×2 any other 3×2 will do.
As a buyer, you need to be aware that in older, inner-city areas these reports are at best a vague estimate of what a property might be worth, at worst a bum steer that could cause you to miss out on your dream home. I’ve seen them both grossly under and overestimate value.
As a seller, you need to know that your buyers are utilising these reports, so it pays to check the estimate they’re spitting out for your home if you’re considering selling.
And the best way of estimating value? Ask a local real estate agent that knows the sales evidence and the area. They can provide both buyers and sellers accurate sales comparable sales evidence that can help them buy and sell with confidence.
Natalie Hoye is the Founder and Licensee of Red Fox Property Group – a boutique agency doing things differently in the suburbs surrounding Beaufort Street. We call it ‘real estate alchemy’: a genuine blend of science and intuition, marketing and magic, head and heart. The Red Fox Way. And we’d love to chat with you about your local real estate needs. Call us now on 0405 812 273.