Responding to concerns about inaccurate valuations

It is inevitable that at some point a potential vendor will question the accuracy of the value estimate that Truval has supplied them.

A low estimate will concern them and a high estimate will delight them – the latter potentially leaving you with the challenge of reducing their aspirations.

Sadly, there’s no way around this. The issue here isn’t confined to TruVal – Zoopla’s valuation engine gives “interesting” results and all of TruVal’s competitors are likely to slip up.

If you get an issue, it is worth explaining how TruVal works.

I like to call it an Algorithm because it sounds impressive but in fact it is simple addition and subtraction.

TruVal looks up the price the vendors paid for the property. You can look it up yourself here – https://landregistry.data.gov.uk/app/ppd/. TruVal notes down the purchase date.

It then uses the Land Registry’s House Price Index Data (https://landregistry.data.gov.uk/app/ukhpi/). That’s a calculation of the average percentage amount each basic property type (flat, terrace, semi and detached – no separation for bungalows) has changed in each month in each local authority district in the UK.

Truval then just adds or in some cases subtracts this figure to the purchase price figure. So, if the property was last sold 4 years ago, TruVal will apply 47 monthly corrections to come up with an estimate. There is an option that I can configure to add a rounding up or down figure. Back in 2020-2021, the Covid Years, agent customers asked me to add 5% to every estimate because the market across the whole country was racing and the stats couldn’t keep up – the land registry takes 3 months to add new transactions to both lists. I removed this once things cooled down.
Unlike some other valuation models, it doesn’t look at neighbouring properties or any other factors. I decided that looking at a neighbouring property to get an estimate of value or even an estimate of value change if sold more recently is fraught with inaccuracy danger.
The big snag with the way TruVal works is that a local authority area can be large with parts in high demand and parts in low demand or it can be tiny with few comparable transactions. If the latter, one unusual transaction can easily skew the figures.
In particular, we can often have a problem with high value properties. “Detached Houses” covers a multitude of price ranges – from small modern estate houses to mansions. The two extremes may have very different rates of value change.

if you are confronted with an awkward situation, my feeling is that you have to decry and denounce all automated valuations for what they are – a simple guess. My standard TruVal homepage and the “slides” that appear before the estimate are designed to discredit the accuracy of the resultant figure and to encourage the potential vendor to have a valuation appointment. We all know that this is the only way to property assess and advise. If they really push back, maybe produce figures from other equally inaccurate automated valuation models.
In the end, just enjoy the fact you’ve got a good lead, that the potential vendor can’t possibly blame you for the results of broad based government statistics and that you’ve been given an opportunity to impress them with your professional knowledge and expertise!