Homes.co.nz starts flagging when estate agents influence price estimates
Homes.co.nz has started highlighting when real estate agents’ current market appraisals influence the website’s HomesEstimate.
The popular property website’s chief data scientist, Tom Lintern, said the move was made to improve transparency for prospective buyers and researchers.
Homes.co.nz has been criticised previously for allowing real estate agents to provide their own estimate prices without highlighting it to customers.
The use of agents’ appraisals could result in the estimated price increasing by hundreds of thousands of dollars.
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* Homes.co.nz criticised for allowing estate agents to influence price estimates
Lintern said changes took effect on May 9, and included adding an ‘agent appraised’ badge to an estimate, with a mark on the property’s estimate timeline to show when the appraisal was lodged.
In later estimate updates, the HomesEstimate would update in line with market trends, but the badge would stay in place.
”We sought feedback from REA (Real Estate Authority) about this, and they were supportive of the improved transparency for our users,” Lintern said.
“It’s important to note that all certified agents have to comply with the Real Estate Agents Act which states that appraisals must realistically reflect the current market and be supported with comparable sales.”
A recent listing in Petone, Lower Hutt, on Homes.co.nz shows the influence a current market appraisal an have. The HomesEstimate had been $1.07 million on March 10, but jumped to $1.65m on March 30 after it was updated with an agent’s appraisal. The property was listed May 19.
A notice on the listing reads: “The HomesEstimate for this property has been updated using an agent appraisal range. This is not the actual appraisal range for this property and a guide only.”
The property was last sold on November 4 last year for $1.04m, according to CoreLogic’s Property Guru. About six months before, it sold for $820,000.
Lintern said when submitting an appraisal, agents had to declare it was prepared in accordance with the Real Estate Agents Act, and the property owner had given permission to have the HomesEstimate updated.
Agent-appraised listings continued to be the minority, with about 1% of listings receiving an agent appraisal, Lintern said.
“At the end of the day, however, these are only estimates and a property is only worth what a vendor is prepared to accept, and a buyer is willing to pay,” Lintern said.
The website’s previous practice was criticised by Consumer NZ chief executive Jon Duffy, who said letting people know an estimate had been generated by an agent acting for the vendor would be good for transparency.
Duffy said Homes.co.nz’s decision to highlight when an agent’s appraisal was used was a step in the right direction.
“The concerning thing is, I guess, the number of people who may not have fully understood that this is an agent appraisal, and not a proper valuation prior to this disclaimer being put in place.”
Duffy said viewers may still confuse a real estate agent’s appraisal with a professional valuer’s estimate, but the text displayed on Homes.co.nz highlighted which had been used to inform the estimate.