Estimated Value FAQ's

 

Want to know more or have some questions about the estimated value used by CoreLogic? Here is a list of the frequently asked questions on calculating the value of a property.

 

What is a property worth?

The market value of a property is what someone is willing to pay for it at the time of sale. Any other valuation, including real estate agent appraisals and professional valuations are merely a ‘best-informed’ estimate.

When appraising the market value of a property, a real estate professional will typically draw upon their local knowledge of recent local sales trends, their knowledge of buyer behaviour in the area and their firsthand conversations with actual buyers currently active in the local market. However, even the best informed valuer can only draw on the past performances of the real estate market.

What is an Estimated Value

It’s an estimate of a property’s approximate value based on local market data at a point in time based on available data and is not indicative of future market performance.

Estimated Values are calculated for over 10 million individual properties nationwide with associated ‘confidence levels’ based on how much data is available.

Estimated Values are mathematically calculated using publically available data sourced from state governments, real estate agents and other third party data agencies.

In order to improve the accuracy of the Estimated Valued Value, we encourage the correction the data we hold in order to give you a better indication of the approximate market value of a property.

The Estimated Value is not a professional valuation, rather it is calculated to provide a general guideline for property related conversations.

A Estimated Value should not be relied upon in lieu of professional advice and we encourage homeowners, buyers, investors to exercise their own skill and judgment when considering purchasing a property, seek professional advice where appropriate and conduct other research such as:

  • Getting a professional valuation from a registered or certified practising valuer
  • Getting a comparative market analysis from a trusted, local real estate agent, builder or other industry professional
  • Physically visiting the property
What is the 'Estimate Range'?

The ’Estimate Range’ is calculated directly from the Estimated Value, and shows the upper and lower limits of the values estimated by our mathematical model. For example, if the Estimated Value was $300,000, the range around the estimate might be $270,000 to $330,000 – being the values which form the lower and upper Estimated Value).

The Estimate Range can vary in magnitude depending on our ability to compare similar homes. A wider range indicates that either: (i) less data is available; or (ii) alternatively there is more volatility in the data. By contrast a smaller range means that we have relatively more information available to help compute the Calculate Estimate and the Estimate Range. This is generally indicated underneath the Estimate Range, next to the heading ‘Accuracy’.

What is the Confidence Indicator?

The Confidence Indicator is based on a statistical calculation as to the probability of the Estimated Value being accurate compared to market value.

We have 3 levels of Confidence Indicators: High, Medium and Low

The Confidence Indicator should be considered alongside the Estimated Value. An Estimated Value with a “High’ confidence is considered more reliable than an Estimated Value with a ‘Medium’ or ‘Low’ confidence.

The Confidence Indicator is a reflection of amount of data we have on the property and similar properties in the surrounding areas. Generally, the more data we have for the local real estate market and subject property, the higher the Confidence’ level will be.

What are “Past Sales”?

The recent sales are a representation of historical sales that have occurred in the local market. They are not necessarily representative of the most recent sales that have occurred in the neighbourhood or had the most influence on the calculated estimate.

What data is used to derive a Estimated Value?

The Estimated Value is derived using a mathematical algorithm; therefore data is key to its accuracy. It’s not only important to have accurate data points for the property in question, but also for properties in the surrounding areas. The algorithm uses physical attributes and transactional history of properties that include but are not limited to:

  • Accurate full address;
  • Property attributes such as bedroom, bathroom, garage, floor size, land size
  • Historical and recent sales information.
  • Local market trends

Also let us know if the property has been recently renovated or subdivided. All this information helps improve the accuracy of the Calculated Estimate.

Why is the Estimated Value so low or so high?

The Estimated Value is not a valuation or a professional appraisal, rather a mathematical calculation to provide a general guideline for property related conversations.

In order to improve the accuracy, we encourage the correction of the data we hold in order to give you a better indication of the approximate market value of a property. The mathematical algorithm considers hundreds of data points, including the following data points:

  • Accurate full address;
  • Property attributes such as bedroom, bathroom, garage, floor size, land size; and
  • Historical and recent sales information.

However, it is worth noting that an update of data points may or may not affect the Estimated Value because of the sheer volume of data points considered.

The reliability or accuracy of the Estimated Value may be adversely affected by the following factors:

  • Insufficient data
  • If the property is particularly unusual compared to other properties previously sold in the area
  • It is in a remote area where comparable sales are limited
  • Has characteristics not commonly found (such as a high number of bedrooms bathrooms, a swimming pool, landscaped garden etc.) in surrounding properties
  • Recent changes to the property such as renovation or subdivision.

Also let us know if the property has been recently renovated or subdivided. All this information helps improve the accuracy of the Estimated Value.

How are Estimated Values rated for accuracy, reliability and coverage?

All Estimated Values rely on the accuracy, comprehensiveness, and timeliness of the data they use and so their accuracy will vary depending on a wide range of factors. The most significant factor is the number of recent home sales in the area and how similar the property is to surrounding area properties. Generally, all Estimated Values tend to be less accurate in rural areas where sales are fewer. Estimated Values are also less accurate when estimating the value of properties that are unusual, much larger than average, or have particular distinctive features.

I don’t agree with the Estimated Value, can you change it?

We cannot physically change the output from the mathematical model that generates the Estimated Value. An Estimated Value can only respond the data available. Therefore, in a rapidly rising market, there is usually a lag between the sale of the property and when we receive the information, which means the Estimated Value may take a few days or a few weeks to respond to recent sales, depending on when we have received the information.

We also cannot manually change individual records due to all estimates being calculated automatically.

If you feel that the estimate of value is in error please contact our Customer Care Team and we will investigate the estimate of value published.

How do we come up with the Estimated Value and what's the formula?

The Estimated Value is derived using a proprietary automated valuation models (also known as an AVM) that applies advanced mathematical algorithms to analyse our data and identify relationships within a specific geographic area, for a specific time period using property attributes, features and sales history.

Property attributes like bedroom, bathroom, garage, floor area along with its sales history are given different weightage based on their influence on the final Estimated Value.

How often are Estimated Values updated? Does it ever change?

Yes. The Estimated Value mathematical algorithm is constantly refined against the actual sales prices for similar properties in the area, and recalculated against each property on a regular basis, using these refinements and additional data that we collect within that period.

We also have a team of statisticians working every day to improve the accuracy of the Estimated Value. We have been through several versions and also make small ongoing changes that may result in incremental changes over time.

Is the Estimated Value a Valuation of my property?

The Estimated Value is not a professional valuation; rather it is calculated to provide a general guideline for property related conversations.

An Estimated Value should not be relied upon in lieu of professional advice and we encourage homeowners, buyers, investors to exercise their own skill and judgment when considering investment decisions, seek professional advice where appropriate and conduct other research.

Professional Valuations are performed by certified or registered practising Valuers who are able to inspect the property and local area and perform a valuation in accordance with the required professional standards. Conversely, an Estimated Value relies on public data to determine approximate market value based on local market trends.

The Estimated Value does not have awareness of the physical condition of the property, including renovations or improvements, or the particular location or views that may affect market price.

Who runs the Estimated Value?

The Estimated Value has been designed by a team of statisticians. It’s an automated process that runs on a regular basis. There’s no ability to manually change the Estimated Value for a specific property. Any new data we receive about a property is ingested and used by the algorithm to derive a new Estimated Value.

Disclaimer

An automated valuation model estimate is a statistically derived estimate of the value of the subject property generated:

  • by a computer driven mathematical model in reliance on available data;
  • without the physical inspection of the subject property;
  • without taking into account any market conditions (including building, planning, or economic), and/or
  • without identifying observable features or risks (including adverse environmental issues, state of repair, improvements, renovations, aesthetics, views or aspect) which may, together or separately, affect the market value,(AVM Estimate).

An AVM Estimate is current only at the date of publication and is not indicative of future market performance. An AVM Estimate is intended as a general guide only and must not be relied upon as a professional valuation. CoreLogic expressly excludes any warranties and representations that an AVM Estimate is an accurate representation as to the market value of the subject property.

To the full extent permitted by law, CoreLogic excludes all liability for any loss or damage howsoever arising suffered by the recipient, whether as a result of the recipient's reliance on the accuracy of an AVM Estimate or otherwise arising in connection with an AVM Estimate.

© 2017 RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic). All rights reserved. Version 1 22 May 2017.