“The idea for PropertyPricer followed years of frustration and disappointment as property professionals could never explain to me how they came up with their estimates for my properties. My properties were always compared to properties recently sold in the same area. The individual features of the different properties were so wide and varied it was always so obvious to me that it was never a direct and valid comparison. Why are these important differences not measured when measurement is common practice everywhere else and in all other businesses? I was told it couldn’t be done in real estate as there were just too many variables to do it accurately. I decided it could be done.” – Ross, founder of PropertyPricer
In developing this new method, we undertook extensive market research involving many interviews and 25 focus group discussions. Results clearly show that most people (75%) are frustrated and sceptical with the current way properties are valued. Typically, a property valuation is based largely on the last three sales in the area. This is unconvincing when we know properties are different in many important ways.
“I am always a bit sceptical of prices given to me based on three other properties in the same area. I like how all the features of my property are included and it gives me a calculated answer without any guesswork.” – Market research participant
Current methods tend to be based on comparisons and speculations, often varying greatly from one source to the next. This results in generalised and broad price ranges creating a lack of confidence in the dollar figures available. This can become a guessing game where people are at a great disadvantage in the negotiation exercise.
Our research shows that the majority of participants (69%), felt they couldn’t get accurate property values they could rely upon. They said this impacted their negotiation power as buyers and sellers. This has created a clear and obvious need for a more accurate and transparent method that people know they can trust as part of their toolbox in valuing properties.
A lot of properties for sale are now price on application, and there is a current trend for ‘blind auctions’ where buyers are asked to make an offer without knowing what other parties have offered.
“We are going in with nothing, totally in the dark, afraid to offer too much and over capitalise or to offer too little and miss out. PropertyPricer provided us with a realistic price indication close to what we were prepared to pay, so it was reassuring going into negotiations with that information.” – Michelle, NSW
Equipped with PropertyPricer’s specific valuation, people are more empowered in the negotiation process and enabled to make confident choices and informed decisions.
Accurate measurement is common practice in many aspects of our lives, in business and in government. Yet when it comes to property almost nothing is measured except the size of the block of land. The size of the building, whether the kitchen and bathrooms have been renovated and when, the size of the bedrooms, and outlook / views… these value adding components are only mentioned, they are not considered and measured when determining a property’s value.
PropertyPricer analyses a property breaking down all the components that contributes to its value. These are: the base building components, style and condition, room sizes, renovations, special features, aspect and proximity factors. Research also showed us that there are a number of other factors that contribute significantly to a property’s value; factors which have nothing to do with the property itself. These are: the suburb / town that the property is located in, if it is on the waterfront, if it has a water view, if there is any developer interest, and if there is any special local knowledge factors that can impact positively or negatively on the property.
All these factors are measured by our points system, answers selected attract different amounts of points which accumulate behind the scenes to arrive at a total point score for the property. Combined with CoreLogic sales data our complex formulas convert the points to a dollar figure generating an underlying predicted selling price in the normal market. The final calculation includes and measures the current market conditions and the emotional / personal circumstances of the buyer / seller revealing a final predicted selling price for the current market.
“PropertyPricer has challenged the myth that variables cannot be measured in a specific property and between properties.” – Ross, NSW
PropertyPricer’s detailed valuation method captures all of a property’s individual special features for example security, granny flats, air conditioning, boat / caravan parking, pool, gardens / landscaping and even details about the entertaining and living spaces.
This level of detail highlights the differences in properties which make one property more or less valuable than another. For example, 2 properties in the same location with 4-bedrooms, 2-bathroom, 2 car spaces, on approximately the same land size can appear similar. However, one property has a newly renovated designer kitchen with the highest-level appliances, ducted air conditioning throughout and professionally landscaped gardens. These special features make this property more valuable than the other.
“I like how PropertyPricer takes into account a lot of data about my property. They included my covered carport for my caravan and my rented granny flat.” – Market research participant
Research tells us that waterfront locations and water views add between 20% to 100% value to a property’s worth. Yet the specifics of such value adding features such as the type and the extent of the view are not currently included in a property’s valuation. PropertyPricer’s sophisticated system can for the first-time measure and integrate waterfront locations and water views into the final price prediction.
“PropertyPricer’s valuation was able to include details about my ocean front property with uninterrupted water views that I can see from my balcony, kitchen and living room.” – Deborah, NSW
PropertyPricer’s sophisticated method integrates the current market conditions as well as the emotional and personal circumstances of the buyer and seller.
People’s varying motivations to buy or sell a property may lead them to offer or accept above or below a property’s underlying value. PropertyPricer is the only method available that considers these important factors in a valuation.
“My late husband and I renovated our heritage listed property together. I have a strong emotional attachment to my home so I will only sell it to the right people. It was helpful to see how my feelings for the property could influence the predicted selling price.” – Lisa, NSW
PropertyPricer isn’t just a simple valuation service, our unique formulas allow for a direct price comparison between all suburbs / towns for similar properties (i.e. properties with similar property points).
“We were thinking of moving and using PropertyPricer allowed us to see what the same size, style and quality of home would cost in other locations. It was so helpful to see how the price for a very similar home changed with different suburbs.” – Steve, NSW