There are plenty of companies online that offer you an “instant property valuation”, but can they do more harm than good for some buyers and sellers?
Online property listing portal Zoopla has recently come under fire for its free valuation tool after its house price estimates were criticised as inaccurate.
The tool was updated recently with improved algorithms, according to the company. It can now be used by agents to generate leads from people who want a full property valuation after their Zoopla estimate. Prospective homebuyers and sellers can get a price range estimate on the website, while landlords can get an estimate for rental prices of a property.
What’s the problem?
A number of users have been unimpressed by the updated offering, complaining that the estimate has drastically changed the projected value of their property – and in most cases reduced it.
One user claimed that the new Zoopla estimate for their property was significantly lower than the valuation they’d received from an estate agent only a couple of months earlier; with a discrepancy of around £127,000. The Zoopla estimate they’d had at the time was also greatly reduced through the updated system.
The difference between an estimate and a valuation
While it is always advisable to have a property properly valued by an expert, many people still refer to online estimates to judge house prices. This applies not just for homeowners who might be considering selling up, but also for buyers and property investors to assess prices in an area.
Zoopla uses an automated valuation model powered by Hometrack, which is a major automated valuer of UK property. It uses data such as previously sold prices for the property, changes in market values of similar homes in the area, property characteristics and local area and address-level data.
However, when an estate agent conducts an official valuation, they go into much more detail on the specifics of the property. This includes the decorative order of the home, how spacious or flexible the space in the property is, the state of the kitchen and bathrooms, and potential to expand or modify.
They would also look at factors such as transport links, local schools and other amenities and the local neighbourhood. The garden is also assessed in terms of its positioning, how private it is and its size.
Zoopla advises using an agent
Commenting on the criticism, a Zoopla spokesperson said: “We’ve improved the model we use to provide house price estimates, increasing its accuracy and ensuring more properties are covered than ever before.
“While we are confident that the majority of customers and agents will respond positively to these changes, we recognise a small number of customers are disappointed by their new estimate.”
“We’d urge customers who are disappointed to contact us so we can look into their estimate in more detail. If customers wish us to remove their estimate we are happy to do so while we resolve their query.
“It’s important to remember that the value given is just an estimate, and for a detailed, no strings attached house price valuation using the latest local knowledge we’d always recommend homeowners contact a Zoopla estate agent who will be happy to help.”