You have decided you want to sell your house. Most likely, your first instinct will be to jump on one of the online valuation tools, quite probably Zoopla, and find out how much your home is worth. You might be in for a shock.
Estate agents are often confronted with the question: “Why is your valuation so different to Zoopla’s figure?”
Good question. When you do a computer-generated online valuation, it’s important to remember it is just that: computer-generated.
Because of this, the reliability of the Zoopla, and other online valuation tools, varies enormously. Zoopla only has a fraction of the information a local estate agent has to draw on. It uses data that is freely available from third-party organisations, including the Land Registry, Registers of Scotland, the Royal Mail and Ordnance Survey. This includes some very basic information, such as the price the property last sold for and whether it is new build, detached or semi-detached. In Scotland, an even smaller range of data is available, which makes online valuations even more difficult and imprecise.
Using a computer-generated algorithm, Zoopla utilises this information to estimate the current value of the property. It draws on property trends, including prices that other properties sold for on the street or in the wider area, and provides a potential price range that is often so wide that it is meaningless or just plain wrong.
In-person property valuations are much more nuanced and take into account much more than just historic prices. Zoopla will not be aware if your street has many diverse properties and plots, with extremes of value. Since Zoopla operates on averages, this diversity can massively skew an average, hugely inflating some house prices and radically undervaluing others. It will take into account the number of bedrooms in a house but not the size of a property or whether you have upgraded it in any way such as adding an extension, the aspect of the garden, the off-street parking, or a fantastic view.
Zoopla cover themselves with the caveat that “It’s important to remember that the value given is just an estimate”.
An in-person valuation carried out by a local estate agent or a surveyor will often result in a different valuation figure. Surveyors are bound by strict professional standards laid down by the Royal Institute of Chartered Surveyors (RICS) and Estates Agents operate to standards of the National Association of Estate Agents (NAEA). This training, coupled with years of experience, enables estate agents to come to an informed opinion when valuing a property and provide a more accurate and realistic valuation taking into account local market trends.
To arrive at their valuation, an estate agent will consider multiple local factors down to street level. They will assess the condition and the size of the property, look for any modifications and modernisation, take into account the size of the garden, any off-street parking, views, and gauge the all-important “street appeal”.
They will identify a minimum of three comparable properties that have sold recently, drawing on properties of a similar size, condition and, where possible, location.
The agent will also have an insight into possible future developments that may harm or enhance the value, such as a bypass that has been primed for construction, or if a big new housing estate is on the cards slap-bang in the middle of your fantastic view. Equally, they will know if a particular supermarket or school is opening up down the road that can make your property more attractive.
Ultimately, the true value of your property is what a buyer is willing to pay for it. It is best to compare your home with other nearby properties on the market, looking at how your property stacks up with regards to size, condition, features, or location, none of which an online algorithm can access reliably.
In short, don’t rely on Zoopla or you could be disappointed. Use it for an initial, ballpark estimate, and if you are serious about selling your house, seek other data points. There are other free online valuation tools such as ValPal, mouseprice.co.uk and nethouseprices.com but the truth is that an in-person valuation carried out by a registered estate agent will always be more accurate.
So, the best advice is to get your local estate agent to value your property. Online algorithms cannot account for the irrational way in which humans buy their next home. Estate agents can.