More from Opes:

• How much is my home worth?
• Valuation Wars: How to navigate conflicting opinions on property value | Ep. 1233
• Homes.co.nz vs Oneroof vs QV vs TradeMe – Which Is The Best Online Valuation Tool? | Ep. 928

How come online valuations are so wrong?

The online valuation providers use automated computer algorithms to estimate a home’s worth.

They look at what properties have recently sold and whatever public records they can get their hands on.

And since it’s just a computer estimate … it will be wrong.

They haven’t walked through your house. They haven’t done a drive-by. They may not even have an accurate understanding of how many bedrooms and bathrooms you have. 

So the data they’ve based that estimate on could be wrong. 

Let’s come back to that same Te Atatū investor I mentioned before; the one who’s property dropped $185k.

She pointed out that a nearby 1-bedroom home was valued for more than her 3-bedroom property. 

“How can they be worth the same?” she asked.

Simple: the model doesn’t know, or it got it wrong, or both estimates are off (one higher, one lower). 

That’s the thing – these tools apply formulas to every property in the country. No human is checking if the data is accurate for every single property. 

That’s why you use a professional (in-person) valuer when you need them.

I’m selling my property and the online valuations are off. What should I do?

Inaccurate online valuations can be a hassle when you’re selling your property, so here’s what you can do:

#1 – List with a price

More than half of Auckland listings don’t have a price. Instead, real estate agents list them as auctions, deadline sales, or “by negotiation.” 

In the absence of real info, buyers will look at online valuations. If you don’t like what they see, take back control. 

Tell them what you want. List your property with an asking price, or use “Buyers Enquiry Over $X”.

#2 – Request an agent appraisal

Real estate agents can input their appraisal into Homes.co.nz. That can shift the estimate upwards (or down).

Agents can’t control all the websites, but they can influence some of them.

#3 – Get a registered valuation

If you want to buy another property you might need to get an in-person valuation to get the mortgage approved. 

This costs money (about $900). But it’s more accurate – great if you’re selling, and even better if you need it for the bank.

Here’s why you can ignore online valuations (most of the time)

Here’s the truth: online valuations aren’t real money, and they’re not gospel.

They can help you get a starting point (for buying or selling). But they are a directional tool. They give you a ballpark, but they aren’t precise. 

So next time you see your number drop – breathe. Unless you’re selling, it doesn’t matter. And if you ares elling, the market will decide your home’s true worth, not a computer.