As the internet becomes more integrated into our daily lives, we have come to rely on it for various purposes, including property valuation. With the arrival of online home valuation websites, homeowners can now get an idea of how much their property is worth without hiring a real estate agent. However, the question remains, can you trust online home valuations? The short answer is no. While online home valuations can provide a rough estimate of your property's value, they rarely provide an accurate value and should not be relied upon for a reliable valuation. These tools use algorithms and public data to estimate a home's value, but they don't take into account certain factors that can significantly impact a property's worth. These factors include your property's condition, the unique features of your home, and current market conditions. Let's take a closer look at why these factors are important.

Property Condition:

Online home valuations don’t take into account a property's condition. While they can pull data on similar homes in your area, they don't consider if your home is in better or worse condition than those in the database. A well-maintained home will typically fetch a higher price than a poorly maintained one, but online valuations can't distinguish between the two.

Unique Property Features:

Another aspect that online home valuations don’t take into consideration are any unique features of a property. These features could include a large backyard, an upgraded kitchen, or a pool, all of which can significantly impact a home's value. Online valuations are limited to the data they have in their database, and they cannot take into account any unique features that may set your property apart from others in the area.

Current Market Conditions:

Arguably the most important factor that online home valuations don’t consider? The current market condition! The housing market is constantly changing, and home values can fluctuate depending on a variety of factors like interest rates, supply and demand, and economic conditions. Online valuations don’t have access to real-time market data and don’t account for these fluctuations in the market.

Relies on an algorithm rather than expertise and experience:

Last but not least, online home valuations are not conducted by licensed appraisers or real estate agents. These professionals have the expertise and experience to provide an accurate valuation of your property. They take into account all the factors mentioned above and conduct a thorough analysis of your home to provide a comprehensive valuation.

To paint a picture, we've had homes for sale that potential buyers checked out online and thought they were worth around $750,000, and these homes have then gone on and sold for over $1.5 million. That's a big difference in price, which can be confusing for buyers. Usually, in situations like this, we find that buyers tend to trust what they see online rather than what the agent says, which can create a bit of a trust gap between the agent and the buyer.

While online home valuations can provide a rough estimate of your property's value, they should not be relied upon for an accurate valuation. This comes down to the fact that these tools cannot account for too many factors, and they don’t have access to the most up-to-date market data. The best thing you can do is research by obtaining reports from recent sales evidence places like Landgate, and speaking to local real estate agents in your area who can provide you with local sales evidence. Relying solely on computer-generated algorithm valuations is naïve, as they are more often than not far off from being accurate!