This article is from the Australian Property Journal archive
ONLINE property reports and valuation tools are useless, wasting time and money, according to Sydney real estate agent Barry Goldman.
Goldman the principal of Portfolio Realty said online property valuations and analysis models are not basing property prices on the full range of considerations and variables and could be misleading consumers looking for accurate pricing estimates – resulting in missed opportunities and lost sales.
And Goldman believes that fair values for a residential property should be based on a range of considerations including aspect, view, condition, and seller motivation, as opposed to simply basing prices on the last sale price or regional average.
“These property reports cannot possibly provide accurate pricing information. I don’t know any computer that can put these fundamentals in the mix and then produce a reliable estimate,” he said.
“The last thing someone considering selling or buying their property needs is bad guidance on price to start with.
“In a volatile property market where the economy and market is slowing, mistakes on pricing could mean a long time of deep financial pain and huge risks. Whether the valuations are too low or too high, they create an unrealistic expectation for both buyers and sellers,” he added.
Goldman cites a recent sale in Pyrmont, where a potential buyer placed an offer on a property based on the value estimate that was obtained online, only to be disappointed at the sale price, to illustrate the problem.
“A property was placed on the market for $499,500. We received an offer from this buyer who told us all he would pay was $465,000, and based this on the value estimate he was provided by on the online property report he had obtained. The day we received this offer we in fact exchanged the property for $495,000, and had to advise the potential buyer it had sold for $30,000 more than the report had estimated, leaving the customer very upset and in the belief that his online estimate was unfair,”
Goldman said this is an obvious example of websites applying generic information to determine estimate property values, when specific criteria are needed to provide accurate pricing estimates.
“These websites are also written with complete disclaimers by the party providing the valuation, which can be unreliable and dangerous,” he continued.
In addition, Goldman said licensed real Estate agents in New South Wales are not allowed to charge for opinions or estimates of value, however online search engines are allowed to do so – which raises serious questions.
“Anyone looking to invest in property needs to seek independent advice. Seeking pre purchase property advice can offer people piece of mind about the price they are paying for their home.
“I consider accessing residential property values as an exact science at best. When negotiating a real estate purchase, a wise buyer would benefit from physically comparing properties or at least searching the internet for properties with similar features, as well as talking to agents to get a general feel for the market,” he concluded.
Australian Property Journal
