OK, so you want to sell your house or apartment. The first question that comes to mind for most people must surely be, “how much is it worth?”. In a previous Blog, “A Corporate response to the big question….Is it worthwhile for us to build?”, I suggested that we’ve all become property experts with a fairly good idea of how much our place is worth but what we really want to know is, how much does an “expert” think it’s worth? We then call a few real estate agents and ask them to come round to have a look. We’re hoping that they’ll be suitably impressed by our home and taste, indicating that in some way it’s better than other places in the street and consequently suggesting a sale price at the upper end of the range we had in mind. The agents rarely disappoint and usually tell us what we want to hear. Of course, to be fair to the real estate agent, it’s in their interest to propose “ambitious” prices and who knows, you might get it? To propose a more realistic value might mean losing the commission to a competing agent who is prepared to offer a more generous estimate. 
But how do they know what our place is suppose to be worth and seem so confident about its value? The answer to this question was the subject of lecture 5 on “RP Data”, presented by Allan Teale a property consultant and lecturer both at TAFE NSW and UTS. RP Data is a web application which provides property information, analytics and risk management services in Australia and New Zealand. So, before coming around to value your home, the estate agent logs onto RP Data, plugs in your address and up comes information on your property, LOTS of information on your property.
Below I’ve shown the initial results of a search on a property which shows summary information;
Drilling down displays more detailed information or by clicking on the “Market Compare” tab you could look at other similar properties in the area which have sold recently to get some comparable prices. This is the secret of how estate agents are able to tell you how much your home and castle is worth. Alan Teale did not seem that enamoured with RP Data preferring a competitor called PriceFinder. He showed us a number of examples where the data held in RP Data was not correct. The examples in the slideshow are an RP Data Entry for a residential unit that shows a house and an entry for a commercial unit that shows a garage!
As property data is entered into RP Data by estate agents, post-sale with little incentive to get it right, I wasn’t really surprised. I wonder, as Alan Teale seems to think, if PriceFinder which uses the same method of data collection could really be that much better?! Maybe, like the scene from the office of the retro-future, in the film “Brazil”, PriceFinder has an office full of data checkers whose sole job is to ensure the quality of the data… but I suspect not.
Coming from an IT background, the idea that there seemed to be little validation of the data worried me. A system is only as good as its data; “Garbage in, Garbage out”. I agree with Allan Teale in that RP Data is a great tool that helps the estate agent come to a plausible price range for a property but agents need to be cautious about the data on which they are basing their judgements. Real estate agents must sanity check the quality of the data and nothing does that better than a visit to the property. This tools helps in the decision making process but it doesn’t provide the “answer”. We still need a human being for that and for good or bad, I think real estate agents will be around for a little longer.
One last feature of RP Data that caught my eye was a service called “rp connect”. Advertised as a way for buyers to connect with agents, it’s a blogging service and interestingly enough, powered by WordPress. Intrigued by and feeling perhaps a little dubious about what could be in an estate agent’s blog, I clicked across to RP Data’s blog site. I was presently surprised, there were lots of interesting blogs from different writers, covering all sorts of subjects in the area of real estate industry analysis. It sounds a little daunting but I found it very accessible, interesting and most importantly after a hard day’s blogging…..short.
A musing digital discussion 