Online Property Valuations Are Prone To Errors
Algorithms can set world’s top search engine in motion but they fail to assess a property’s worth effectively. This is the reason why online property valuations have ignited a fair bit of controversy all across Australia. An article on Your Investment Property sheds light on the issue.
Licensed valuers are our best bet
We know that licensed valuers are the ones who have been traditionally given the job of valuating property. I had recently written that they are an underpaid breed given the legal risk at which their job lies. There is a good reason why we should keep sticking to them.
Online valuations are very complex in nature
Online property valuations make the process unnecessarily complex and in a scenario where the otherwise well-informed population is thinly-informed, the chances of dodgy dealings also become very high.
Add to this fact that online valuations often take median prices and use small sample sets. The results which come out from such data may be thick with aberrations.
Online valuations fail to assess unique property characteristics
The article further asserts that online valuations have no way of getting into the skin of a property. There are unique property characteristics which have a say in valuation of its sales price. For instance, two similar-looking lots, within the same radius, but at different elevations (or elevated at different degrees) may command different prices.
We know that the one with steep elevation may be difficult to build on and hence is likely to sell for a cheaper price. Can online valuations shed light on this?
You can read the original article here.
Information on Comparable Sales Figure can help us
I think that the article is right in picking the trend that buyers are losing faith in the asking price (and subsequently agent’s intention) because of these internet valuations. I will stick my neck out and say that banks should only be allowed to value properties. They may incorporate licensed valuers of different skill-sets as they deem necessary for the purpose.
This is our best chance of getting the valuation figure right. Of course, we can also rely on the Comparable Sales Figure data to seek a ballpark projection of our chosen property.
Do you think algorithms can ever be a substitute for experienced property valuers?
