How Accurate Are Online Home Valuations?
Thinking of selling your home in the near future? You’re probably looking for a solid house price estimate to make that happen. After all, you likely understand that overpricing or underpricing your home before you place it on the market can spell disaster for our overall sale. These days, you’re likely to come across a number of online house valuation tools to help you properly price your home, but how accurate is a house valuation online? Does telling a buyer “I managed to value my house online, so I know the price is right” actually help you or hurt you when you go to sell your home? Understanding the process of property valuation online is the best first place to start as you investigate these questions.
How a Free House Valuation Online Really Works
An online valuation of a house is a fairly simple process. You simply select a tool, enter some data, and click through. Suddenly, you’ll have a valuation of your property online. You’ll see these tools in many places, but the biggest one you’ll likely come across online today is the property website Zoopla.
These house valuations online typically present you with a topline figure of what your house might be worth. You may be given a range, too. Perhaps you come up with the idea that your home is worth between £150,000 to £200,000, but they’ll typically also offer you a specific on market valuation price, which in this example, might be something like £175,000.
Is a House Online Valuation Helpful?
These tools are so widely available and so easy to use, you may be left wondering, “Should I value my house online free of charge?” The answer is a bit complex. The reality is that there’s no real harm in using these tools to get a fast sense of the potential sales price you might be able to get when you sell your home. The other side of that coin, though, is the fact that these numbers are truly just estimates. They simply aren’t the bottom line of what your home is worth.
Why a House Evaluation Online Can Be Inaccurate
The way an online valuation of property works behind the scenes is why they can be so variable. In most cases, you base an online house valuation on UK data that has been collected over the last five years. That data comes from a variety of different sources, but in most situations, it’s coming from HM Land Registry, which means that your free online property valuation is based on information that might be a bit outdated. HM Land Registry only updates its data once each month, and the information you’re pulling from with a free online valuation of your house could date back as much as five years.
Think about how much has changed in the housing market over the last five years. Think about how much has changed in your neighbourhood in that time. Consider how much has changed about your house itself at that time. All of those are factors that property valuations online simply cannot take into account.
Imagine, for example, that when you bought your house, you had terrible neighbours. Their property was a rundown mess, but you loved the house and bought it anyway. Five years in, you’ve finished the loft space, redone the kitchen, and done quite a bit of work to make a beautiful outdoor living area in the back garden. What’s more, though, is the fact that those terrible neighbours have moved, and the couple who moved in next to you have made the property absolutely stunning again. A house value online can’t take any of that information into account. All it can do is tell you what similar properties in your postcode have recently sold for. While you’re likely to get a basic number that will help frame your thoughts as you prepare to sell your home after a valuation of your house online, you’re not likely to get that complete picture.
What You Can Do Instead
It’s certainly okay to take advantage of house valuations online for free. What you shouldn’t do, though, is use that number as your only guide as you work to set the price on your home. Instead of just relying on an online valuation of your house, talk to an estate agent. Tell them what your house valuation from a UK online site found, then together, you can discuss where to go next. You could also talk to a home auctioneer about your online home valuation to better set your price on your home.
The bottom line is that while online property valuations can be quite useful, they can also guide some home sellers in the wrong direction.