What is the HomesEstimate?
The HomesEstimate is our estimated market value, computed using a proprietary formula. It is not a formal valuation. It is a starting point in determining a home’s value. The HomesEstimate is calculated from public data, registered valuer’s valuations, and real estate agent CMA’s. For a formal valuation your real estate agent or registered valuer physically inspects the home and takes special features, location and market conditions into account.
We encourage buyers, sellers and homeowners to supplement the information provided here by doing other research such as:
- Getting a comparative market analysis (CMA) from a real estate agent
- Getting a formal valuation report from a professional property valuator
- Visiting the house (whenever possible)
- Getting a building inspection carried out
- Obtaining the local council Land Information Memorandum (LIM) report
How accurate is the HomesEstimate?
The HomesEstimate’s accuracy depends on the availability and accuracy of council and sales data in an area. Check out the table click here under ‘How accurate is the HomesEstimate?’ The table shows the accuracy of the HomesEstimates in comparison to subsequent sales values throughout the last 3 months.
How often is the HomesEstimate updated?
We refresh the HomesEstimate for all homes usually once a fortnight. The number of transactions in a geographic area affects how much we know about prevailing market values of homes in that area. More transactions equals more usable data and improves the accuracy of the HomesEstimate. Also, we use public and user-provided data for house attributes. The more attributes we know about homes in an area (including yours), the better the HomesEstimate.
The HomesEstimate for a property can change when the property sells, a real estate agent provides a market appraisal or a homeowner provides a valuation from a registered valuer. Updating the HomesEstimate in this way is a unique service that homes.co.nz offers. Homes.co.nz acknowledges that an algorithm is unlikely to be as accurate as a physical inspection so we defer to the industry experts when we can to provide the most up-to-date and accurate estimates of a property’s value. Any agents providing a market appraisal do so in accordance with the REA guidelines, including ensuring any appraisals realistically reflect current market conditions.
Who uses the HomesEstimate?
Property hunters and homeowners use the homes.co.nz website to check out the HomesEstimate for their own property or properties that they are interested in purchasing, so they are up to date on what’s happening in the real estate market, prior to purchasing or selling a property. Real estate agents may also refer to the HomesEstimate prior to appraising properties so they are prepared for conversations with vendors who have undertaken their research on homes.co.nz prior to the agent’s visit.
What’s in the HomesEstimate formula?
We use proprietary automated valuation models that apply advanced algorithms to analyse our data to identify relationships within a specific geographic area between this home-related data and actual sales prices. Home characteristics such as house size, location or the number of bathrooms are given different weights according to their influence on home sale prices in each specific geography over a specific period of time. This resulting in a set of valuation rules, or models that are applied to generate each home’s HomesEstimate. Specifically, some of the data we use in this algorithm include:
Physical attributes: Location, land area, house size, number of bedrooms, bathrooms and many other details.
Rates assessments: Property rates information, actual rates paid, exceptions to rates valuation assessments and other information provided by the local council records.
Prior and current transactions: Actual sale prices over time of the home itself and comparable recent sales of nearby homes.
The HomesEstimate is too low or high?
We are aware that many buyers and sellers check out the HomesEstimate prior to contacting an agent. Because the HomesEstimate is based on an algorithm with no onsite visit to assess the property it may be out of line with the current market value. Real estate agents are the industry experts and their property appraisals on subject properties provide the most accurate market value on a property.
How do I contribute to the HomesEstimate?
Real estate agents are invited to submit their appraisal range for a property. The agent must have written permission from the homeowner to submit. This can be done through their Premium Agent profile. Read the instructions here.
The contribution will be weighed against the current HomesEstimate to ensure that a more accurate HomesEstimate is achieved.
Contributing to the HomesEstimate may well help real estate agents with the marketing of their listings, as the HomesEstimate is viewed by potential buyers and the agent contribution is more likely to enable the newly generated HomesEstimate to be in line with the current market value.