Here's why Zoopla valuations may not be the accurate tool that you first thought...
Are Zoopla estimates accurate? Well, that’s debateable. However, if you’re looking to find out how much your house is worth, then Zoopla’s house valuation tool is probably high up on your checklist. For most of us, it’s one of the first bits of market research we do when selling our house.
We log in, all wide-eyed and eager, anxious to see the figure that we’re greeted with. Will it match our expectations? Perhaps exceed them? A couple of clicks later and we soon have the answer. An answer that for the most part we believe, and in some cases take to heart.
So in the event the figure doesn’t match your expectations – the excuses will start to fly. “This house valuation tool knows nothing. How accurate is Zoopla? As accurate as my…” (we’ll leave you to imagine the rest). Either way though, you’re left unsure, probably more unsure than before you requested the valuation in the first place. Hardly ideal.
And in the case the figure meets or exceeds your expectations, it’s entirely possible that because of the accuracy of Zoopla, you’re being misled by false expectations. Hence why when we’re asked if Zoopla estimates are accurate, we always give the same answer. So with this in mind, are Zoopla estimates realistic? And if so, how accurate is Zoopla? All this and more coming up…
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- How does a Zoopla estimate work?
- Are Zoopla estimates realistic?
- How accurate are Zoopla estimates in 2021?
- How should you get a house valuation?
- How to avoid setting an asking price full stop
Zoopla valuations are labelled as estimations of what your house 'could' be worth. But then again, so are all valuations, right? Well yes, but what separates a Zoopla estimate from your everyday face-to-face valuation, is how it's calculated.
A Zoopla house valuation is based purely on data. Data that's rather conveniently collected by Hometrack - a provider of online home valuations, which just so happen to be owned by Zoopla. The data used is collected from a mix of public and private sources, including HM Land Registry, Ordnance Survey and the Royal Mail. The data itself also ranges from historical to more recent, so to some extent Zoopla valuations do take into account common trends at least. However, with them only being refreshed once each month, it's safe to say they're not what you'd call reactive. Therefore, particularly in the event of a market shift, the accuracy of Zoopla estimates can be questionable.
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Out of all the ways you could value your home, Zoopla home price estimates are pretty much as unrealistic as you can get. Excuse us for being blunt, but the one thing that lets Zoopla estimates down is how they're calculated. Unlike a face-to-face valuation they're not based on opinion or anything to do with the perception of a buyer. Arguably the most essential ingredient of any valuation.
You'd have though that since Zoopla began in 2008, that their house price estimates would have increased in accuracy. Now in terms of data, they most probably have. Just as in any form of estimating, the more data you have at your disposal, typically the more reliable the result. So in that respect you could say that Zoopla is becoming more reliable by the year.
However, that does change the fact that Zoopla house valuations are based purely on data. Something which drastically hinders their relaibility if you ask us. So to show you exactly why Zoopla valuations can't be trusted even in 2021, here's just a few reasons why they could be considered unreliable...
- A property's condition - When buying a house, condition plays a major role in the buying decision. Have two identical houses on the same street and one may fetch £20k more than the other purely because it 'looks' to be in a better condition. So by that we mean it's been staged, or at least tidied up. Chances are, if a buyer can't see themselves living in a property, their offer will be lower. Hence why you'd be putting yourself at a disadvantage by not putting in the time and effort into staging your house for viewings. But, because Zoopla estimates are based purely on data, they're not to know what you've done.
- Upgrades and additional extras - Just as condition influences the sale of a house, so do any additional extras. After all, a house with a recent extension, well-fitted kitchen and top of the line bathroom suite is worth far more than it would be without them. It's the same outside too. Spend thousands landscaping your garden to make it more usable, and chances are buyers will pay a premium. Although if you ask Zoopla they don't. In fact, none of the improvements influence your estimate at all.
- Incorrect Details - What with Zoopla working purely around data, accuracy is vital. Only in some instances, the data they have about your property is incorrect. So perhaps when you bought it, the agent tried to imply that the cubbyhole of a office was in fact a bedroom. Or perhaps there was a mix up with the tenure. Either way though, because Zoopla is orientated purely around data, any mistakes do influence your overall estimate. Therefore, your 4-bed according to Zoopla worth more £30k more than the house next door, all despite the only difference being that that house was sold as a 3-bed with an office.
- Different styles of housing - Not every house on a street is the same. You might find a Georgian town house next to a 1950s terrace, or a council house from the 80s next to a dormer bungalow. All of which can largely affect their appeal, and in turn how much a buyer is willing to pay. For instance, period properties are far more likely to demand a premium, whereas a ex-council house is often going to be consider less desirable. However, data on Zoopla doesn't show that. It may list the tenure, but otherwise it's in the dark about any period features or less desirable qualities that a property may have. All of which makes calculating an average for the street a pretty difficult task.
- A lack of comparables - Something else to take into account is that Zoopla bases its prices on an average. One of its main sources of local knowledge is 'recently sold' prices - basically the prices of homes that have sold within close range of yours. But what this means is that if you live in an area where the last sale was in 2010 (i.e. not recent), then the average of the data in your local area will be less accurate. To get more comparables you need to expand your search into other streets, however the chances they'll match in terms of property type and size are slim. Now if you ask us, valuations that don't rely on recent information aren't reliable at all - must be why they call it an estimate.
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When trying to establish how much your house is worth, you don't want to be relying on faulty information, especially when it could cause you to set your asking price at the wrong level. Personally, we'd say that while the Zoopla house valuation tool is a good guide, you should still enlist the help of at least one property professional.
And while we do recognise that agents may adjust their valuation because they're touting for your business, just as a surveyor might be slightly more conservative, the important thing is that you get it valued in the flesh. Get a valuation based on data as well as saleability and you're far more likely to have a smoother sales experience. Here's a couple of ways you can ensure that your valuation is accurate...
- Use an estate agent - Get a few estate agents round to your property to provide their opinion on what you should market your property at. They have the expert local knowledge and should be aware of how well the market is moving, but be aware that they may have their own interests at heart, if they provide you with a larger value than you expect then you may be more inclined to go with them for them to later talk you into reducing the listed price after a few weeks if you’ve had no interest.
- Research via Rightmove & Zoopla - Do your own research, you know what you’ve done in the house & the condition of the property better than anybody else. Look around your postcode area and try find similar properties that are for sale, assess the condition & try and match it to yours to give yourself an idea of the value. You should also look at “actual sold prices” of properties which you can do using Rightmove’s tool.
- Look into how much your home’s value may have changed - Nationwide have a great house price calculator that can calculate the growth of house prices in your area in regards to the overall property market. If it has been a while since you bought your property this can be a good tool to us, for example a house bought in Yorkshire for £100,000 in 1980 will now be worth over £700k.
- Look at demand in the area - How quickly are houses selling in your area? Is it a buyers or a sellers’ market is something that you need to take into account. If you live in a fast selling area you may be able to put your asking price higher than what your home is worth because it will be in demand, however if you are in an area which moves slowly then you may want to drop the price a bit below what you are looking for in order to get a quicker sale. Here’s a great tool where you can find the average sale time by postcode.
- Use a chartered surveyor - The best way undoubtedly to get a valuation on your home is to use a chartered surveyor, but this can cost up to £800, dependant on the survey you get done. They will give you an accurate valuation of your property as they come assess the condition and are knowledgeable in the local area, but this isn’t something you would typically look to do when selling due to the costs involved.
So the reason you're probably even asking 'how accurate are Zoopla estimates?' is because you're thinking of selling you house. So in order to do so, you've been led to believe that you need to set an asking price. A price which you very rarely achieve and if not accurate, can also influence your ability to sell.
Set your asking price too high and you'll likely struggle to get the interest you need to achieve it. Then weeks later be called by your agent, who's now suggesting you go ahead with a reduction. The start of the downward spiral. So when you finally do sell, it's for far less than you wanted and has taken X amount of times longer. Not ideal.
Set your asking price too low and you'll likely get a flood of interest (including many timewasters) before being pressured by your agent to accept an offer quickly. Reason being, there's an offer on the table and they want their fee. Remember: for an agent charging 1% the extra £5k for you is only £50 for them, hence why to an agent, a sale is a sale. Now if there was only a way you could avoid all this asking price nonsense.
Well, there may be just that. You see, an asking price only really applies if you're selling through the open market. So surely all you have to do to avoid setting one, is go off-market. Right?
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Choose us and we can have you completed and moved in just 7-days. Normally faster than an agent can even get you on the market. Plus, we don't charge you any fees - in fact, we cover them. Choose Team TPBC and you won't even have to pay for you solicitors or surveys either. Yes, we're really that generous!
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