How you value your home is important for a number of reasons. If you value you home too high then potential buyers will likely look elsewhere which would leave your property ‘sitting’ on the market which would have a negative effect on any of the subsequent valuations.If you value your home too low then you will be simply missing out on profit. Either scenario would not be favourable. However, listing at just the right price would not only attract multiple offers but could even drive interest up.
The ability to appropriately estimate the value of your home can help you with determining if your investment has appreciated in value. You can use that information to inform your decision on whether to sell now or wait. If you plan to keep the property as a rental, its estimated value can also assist in calculating how much to rent it for.
There are several strategies you can use to estimate the value of your property. Perhaps the easiest way to establish a baseline is to use an online property valuation tool. Here we’ll look at several online tools you can use. We used a sample property located in Mosman, NSW to compare 3 websites realestate.com.au, openagent.com.au, domain.com.au. Spoiler alerert: 1st one is the winner, read on to find out why!
realestate.com.au is fairly straightforward. Simply enter in your address and the tool shows an estimated range which is based on statistical models from local property data. The valuation tool includes a short list of similar homes in the area that have sold and those that are currently on the market. Using these can help you understand your home’s potential value. You can also receive updates that are related to the property but you’ll need an account. One of the downsides with the tool is the wide disparity with the estimates. For one property we entered, we received an estimate between $750,000 to $1,050,000.
openagent.com.au works much the same way as realestate.com.au. Enter in your address and you can get a valuation of your property value based on a number of recently sold comparable properties in the area. You’ll need to provide basic information like the number of rooms and toilets. You’ll then be asked a series of questions including your relationship to the property, when you plan to sell, and why you’re planning on selling. The downside here is that you’ll need to provide an email address and a phone number. But once you do you’ll be emailed a report that shows you an estimated property value along with recent sales nearby and local trends.
Domain.com.au offers a similar property valuation tool to OpenAgent and RealEstate. Just like the other two tools, simply enter an address and you will be given an estimated range of its value. Estimates are based on comparable data in the area. The tool shows medium rental figures for the area which is useful if you decide to keep your property as a rental. You can also see recently sold properties that are similar to yours and those that are currently for sale. If you want to receive updates, you can also track its value but you’ll need an account.
By using these three valuation tools, you can get an estimate for how much your property is worth. Of course, you can also speak with local real estate agents, who normally have a good grasp on the value of properties in their area. Be mindful that real estate agents are prone to provide biased view of the market and frequently adjust it to the persona they are dealing with. Buyers will frequently be given a higher price than sellers. The valuation portals use a data-driven process to estimate the value of property (based on recent sales) and provide an unbiased view on how the overall market is performing in the area.
For simplicity, we summarised the main features all 3 tools offer in table format for the sample 2 bedroom unit located in Mosman, NSW.
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|Verdict||1st Place||3rd Place||2nd Place|
realestate.com.au vs domain.com.au
In summary realestate.com.au and domain.com.au offer a very similar set of features. Interestingly there is a 40K disparity in the price estimate which equates to 4.4 % difference. It is not surprising as the two use different sources for the estimate data. We assume that realestate.com.au calculate their own price range and estimate due to no data source mentioned in the footprint.
realestate.com.au vs openagent.com.au
Openagent.com.au provides 6 less features than realestate.com.au. They do offer additional demographic data for the locality; however, this data is easily obtainable elsewhere. The estimate confidence is Medium which is lower of that seen in RE and Domain tools. This is most likely due to the fact that CoreLogic (who are more conservative in their estimates) was used to source the valuation data.
No matter which method you rely on, estimating the value of your property is beneficial for a number of reasons as it can help inform future decisions and maximise earnings from your investment.