Have you decided to put your property on the market and would like an idea of its potential sale price? Several property websites now offer tools that allow you to assess your property's market value. This online valuation is, in principle, quick, simple and free, although a precise online valuation will often incur a fee.
However, can you really trust these kinds of tools? How is the information you provide assessed, and according to which criteria? Are the results reliable and close to reality? Can a computer program really do the job of an estate agent who visits your property to assess it?
What is an online property valuation?
It is very simple!
The website asks you to complete a form providing information about your property: its exact address and features (floor area, number of rooms, garden, terrace, balcony, etc.). This allows the website to compare your property with similar properties in the same geographical area.
In addition to the property's address and features, the software may assess the condition and quality of your home by asking more specific questions.
Finally, the valuation tool will take one last criterion into account: the market price.
All this information is entered into an algorithm—a set of instructions and operational rules managed by a computer program—which calculates the value of your property based on the data provided.
Is an online valuation really reliable?
To begin with, the price of a property can vary from one street to another, and using a radius around the property—a radius that can sometimes be extremely wide—is a method that sorely lacks precision!
The computer program will not be able to distinguish more subtle variations. Furthermore, imagine that the database does not contain enough similar properties in the same area to make a comparison; it will then be difficult to obtain an accurate valuation.
When assessing the condition and quality of your home, the algorithm will use the construction date as a basis. This is fairly limited information, as a property may have undergone improvements or deterioration since it was built, which will not be taken into account.
In some cases, the program may ask you questions about the condition of your home but, let us be honest, your point of view may not be entirely objective! It can also be quite difficult to answer the questions if you do not really know much about the subject. And it is difficult to be more precise. Indeed, the algorithm would become far too complicated, while an overly long questionnaire often discourages users.
Finally, let us take a closer look at how the market price is assessed. A market such as the property market can fluctuate, so the current economic climate must also be taken into consideration.
Websites also ask you to provide your email address, which may sometimes be used for marketing purposes. Always pay attention to the website's privacy policy.
Online valuation or estate agent?
As we have seen, the criteria taken into account by algorithms are limited.
Furthermore, everything depends on the database used: the more properties it contains against which your home can be compared, the more accurate the valuation will be. But you have no way of knowing!
An estate agent will take additional factors into account, such as the exact location, the property's overall condition, the market price and the prices of comparable properties in the same neighbourhood or even on the same street.
An online valuation remains a fairly reliable tool if you wish to gauge where you stand and obtain an idea of your property's value.
However, this valuation should be confirmed or adjusted by an estate agent, who will take more ‘emotional’ criteria into account and provide an informed, objective outside perspective.
Remember, therefore, that the results of an online valuation should be treated with caution and that it is best not to rely on them alone! Bear in mind that agency valuations are usually free and without obligation, so you have nothing to lose by requesting a valuation from several agencies (it is better to ask several agencies in case you come across a dishonest one, as we discussed here).
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