CoreLogic. What The Heck?

Lord Fart Bucket on 17/06/2024 - 18:36

Evening all,

I ran the free core logic report for my place. And then i ran it for the same house further up in the street. To my surprise, their house was "worth" 50K more. Note that this is the EXACT same home, same building footprint. I know they have amended the inside and reduced the number of bedrooms (they have 4, i have 5).

Looked into more detail, their building footprint is listed as as 237sqm, mine is listed as 193sqm. Interestingly, my plans state 254sqm.
Weird, but maybe an anomaly. So, i looked into a previous place i lived at, a series of townhouses (all identical). An easy $5 to 10K difference between identical properties. I am not going to list all the properties for privacy reasons, but as you may know, whatever you fill in on the police bank site is not validated, so feel free to run a check yourself.

CoreLogic dumps this statement on their documents

Estimated Value as at 10 June 2024. An automated valuation model estimate (Estimated Value) is a statistically derived estimate of the value of the subject property. An Estimated Value must not be relied upon as a professional valuation or an accurate representation of the market value of the subject property as determined by a valuer.

But, we all know lenders do rely on these valuations. And if CoreLogic's data does not make sense, how can I have any faith in the lenders estimation of an LVR?

Does anyone have any idea of what goes into a CoreLogic valuation? What are the inputs to their algorithm?

Financial

Related Stores

corelogic.com.au
corelogic.com.au

Comments

  • barge-in hunter on 17/06/2024 - 19:07

    Yeah it’s a tough spot - they can only work with the data they have, no matter how inaccurate that source data is.

    Fwiw, one of the main sources is realestate web listings - so interestingly enough, a big chunk of this valuations industry is based on the data that a real estate agent enters/markets a property with…. Which all have the same “this information is totally inaccurate” wavers

    Edit; they also use “valuer general” data released by each state for sale and rental pricing… but of course, that won’t tell them if it’s got a pool, 3 living areas, or a gold mine in the backyard

  • JimmyF on 17/06/2024 - 19:07

    Does anyone have any idea of what goes into a CoreLogic valuation? What are the inputs to their algorithm?

    Land size, previous sales of the property, previous sales of property in the area, number of bedrooms, etc.

    Basically all the things you have called out as being 'different' between the two listings for the data they have, will impact the price.

    • Lord Fart Bucket on 17/06/2024 - 19:18

      I thought that… which makes me wonder. In my case, land size is identical. Build time is (nearly) identical. Not sold previously, it's a new estate.
      Then i wondered where they got the building footprint from. I honestly don't know… i don't think it was in the DA listing (private certifiers used).

      • JimmyF on 17/06/2024 - 20:29
        +1

        In my case, land size is identical.

        In real life they might be close, but as you said

        Looked into more detail, their building footprint is listed as as 237sqm, mine is listed as 193sqm

        So CoreLogic thinks they are different, as in yours is smaller.

        • Lord Fart Bucket on 17/06/2024 - 20:54

          So CoreLogic thinks they are different, as in yours is smaller.

          I get that. But CoreLogic is wrong. So, where do they get this incorrect info from?

          • JimmyF on 17/06/2024 - 22:18
            +1

            @Lord Fart Bucket:

            I get that.

            so why are you so worried about the price it thinks for wrong sized land?

            So, where do they get this incorrect info from?

            Fix your house up on domain/real estate. It will flow back to CL in time.

            • Lord Fart Bucket on 17/06/2024 - 22:44

              @JimmyF: Umm… this is not about selling. It’s to do with the valuation for refinancing.

              • JimmyF on 17/06/2024 - 22:59
                +1

                @Lord Fart Bucket: I never said it was about selling, I asked why you are so worried about what corelogic says. It's a guestimate tool at best, far from being gospel.

                If you are refinancing, then your bank has another set of tools to run a report and you can always ask them to correct it if it comes back as wrong.

                • barge-in hunter on 18/06/2024 - 10:43
                  +1

                  @JimmyF: @JimmyF is right

                  As above;

                  one of the main sources is realestate web listings

                  Websites like Domain and Realestate keep a copy of historical listings - and create an information page for each property in Australia. Eg, 1-7 flinders st, melbourne. This data is then shared/sold to places like CoreLogic, and used to generate valuation models/price estimates

  • MS Paint on 17/06/2024 - 19:28
    +3

    What % of the property value is $50k?

    At then end of a day the results are a guide with tolerances.

    You never know a properties value until you sell it. It's only worth what someone is willing to pay.

    • Lord Fart Bucket on 17/06/2024 - 20:01
      -1

      50K on 1M. May not seem like a lot. But what if that 50K puts you in a different LVR ratio, and that could affect the interest rate you'll be paying?

      • MS Paint on 17/06/2024 - 20:05
        +2

        5% is a fair tolerance I reckon.

        Don't banks do their own valuation? They might use this data but it will only be part of their process not the only sauce source.

        • Lord Fart Bucket on 17/06/2024 - 20:09

          It may be a fair tolerance… but these properties are the same. And if this is their tolerance between the same property, i wonder what their algorithm is like.

        • JDMcarfan on 17/06/2024 - 20:15

          New purchases, a majority of the time when LVR >70% and nearly certain if >80%.
          You'd be surprised how many re-fi's get completed without one.
          If the valuation presented is within an acceptable range for the banks internal metrics then they'll accept the Corelogic.
          Further an owner can negotiate the value based on the range Corelogic gives (i.e. if corelogic gives a range of 850-950 with a best estimate of 900k, nearly any bank will be happy to accept the 950k valuation, esp to bring down the LVR a bracket.

          • ginormousgiraffe on 18/06/2024 - 10:22

            @JDMcarfan: Banks will just use the second highest auction bid or the sale price for private treaty sales unless the range is outside the Corelogic high estimate in my experience.

        • ginormousgiraffe on 18/06/2024 - 09:43

          Banks pretty much never go to the property to value a property. They will use Corelogic or similar, especially when just asking for a reval for an LVR standpoint. But if you just tell your bank that Corelogic and co have your property details wrong I'd be sure they would run it against more comparable properties.

      • JimmyF on 17/06/2024 - 20:30
        +2

        But what if that 50K puts you in a different LVR ratio

        As a heavy user of CoreLogic it is at best a guessimate tool, it really has a give and take of 10% on a good day. In some cases it is wildly off in the price estimate for various reasons by $100k's.

      • star-ggg on 17/06/2024 - 22:47

        If you're on the border of LVR ratios where it's going to make a decent difference in $, you can pay a $400 valuation which will get an actual person to assess the property.

        • MS Paint on 17/06/2024 - 22:56
          +2

          Plus another $400 cash in a bag to make sure it's > $x,xxx,xxx.xx

  • sumyungguy on 17/06/2024 - 19:40

    Have you checked the parameters for both properties? Number of bedrooms, bathrooms, etc.; overall condition grading? This data only gets updated when a house sells. I don't have a current login but when I used to use RPData I noticed this info can be significantly outdated.

    • Lord Fart Bucket on 17/06/2024 - 20:04

      Yep. Both properties are 2 years old. Same land size. Mine has 5 bedrooms, neighbour has 4. Both have 2 bathrooms, everything else is identical as it was the same builder. Same features (aircon, stove, etc).
      One difference, mine has roof tiles, neighbour has colorbond.

      The only difference i can see is the building footprint. And both are wrong. And i don't know where they got those numbers from.

      • JIMB0 on 17/06/2024 - 20:29

        They pull the floorplan from the sale listing. These often have errors. If this is not available they will use the council data which gives a year of build and floor area.

        The estimated price value can also vary based off previous sale prices of that particular property compared to similar properties at the time of sale. This is a crude way of evaluating the quality of the property compared to the others.

      • sumyungguy on 17/06/2024 - 20:33

        So you’re saying that has been entered for the two properties?

        • Lord Fart Bucket on 17/06/2024 - 20:56

          I know the layout of the two properties. Floor area is the same. But if this is what they used, i wonder where they got this from.

          • sumyungguy on 17/06/2024 - 21:22

            @Lord Fart Bucket: You need an RPdata login to check. There’s provision to enter a bunch of data which I gather is usually updated by real estate agents. That’s likely why the two properties differ.

            • Lord Fart Bucket on 17/06/2024 - 22:50

              @sumyungguy: Neither I not my neighbours have engaged an REA. It’s 2 new houses in a new estate.
              This data in core logic is likely flawed. I just want to understand where that comes from and what downstream impact it has.

  • MS Paint on 17/06/2024 - 20:27
    +3

    FFS. Hit delete and accept by mistake correcting a typo. FFS what a donkey.

    An estimate is not available for this property. There is either insufficient subject property information, recent sales or the property is considered to be out of scope.

    This is my result. I wonder what the bank would do in my case if I wanted to borrow against it?

    My land size was correct.

    The build date of the actual house was out by 5 years.

  • AngoraFish on 17/06/2024 - 21:36
    +3

    CoreLogic reports are absolute crap.

    It's a completely automated system. They simply use some really basic metrics like lot size and number of bedrooms and run a rough average on recent sales data.

    A lot of the data they use is also outright wrong, and often they don't end up comparing like with like.

    If you don't get the results you like many banks will be happy to have a look at your own professional valuation, if you're willing to pay for one.

    • larndis on 18/06/2024 - 08:58
      +1

      I think the question is though, where does the incorrect data come from?

      • ginormousgiraffe on 18/06/2024 - 09:49
        +1

        Usually the last time the property was sold or listed for rent.

        • Lord Fart Bucket on 18/06/2024 - 12:31

          But what about new properties?

          • AngoraFish on 18/06/2024 - 22:25

            @Lord Fart Bucket: New properties are usually sold or listed for rent. Otherwise you just get an "insufficient data" response.

  • ihbh on 17/06/2024 - 22:21

    Check when properties sold. Recent sale might have part of higher sale price (in a rising market) factored into is auto valuation.

  • bazingaa on 17/06/2024 - 23:51

    my house is moving +/- 50K time to time in Combank app, I think it is also from Corelogic lol

  • SlickMick on 18/06/2024 - 09:28

    But, we all know lenders do rely on these valuations.

    I don't know this. I know that lenders pay $100s to a professional valuer and don't rely on these free estimates.

  • netjock on 18/06/2024 - 09:36

    Money on paper. Not real money. No need to get worked up.

  • simmos on 18/06/2024 - 09:38

    I’m not a fan of Core Logic. They work with banks and realtors. Pumping up prices and market positions to get the hype factor in. DYOR is my suggestion.

  • Duckie2hh on 18/06/2024 - 09:48

    further up in the street
    EXACT same home, same building footprint

    How?

    • JimmyF on 18/06/2024 - 11:13
      +1

      Cookie cutter estate.

  • Daniel Lawrence on 18/06/2024 - 10:33

    you can submit a correction to update their data, go on propertyvalue.com.au and update the property details. mine was changed in a few days.

    • Edgecrusher on 23/06/2024 - 12:59

      This is the correct answer, I’ve done the same as it has all my property details listed incorrectly.

      Unfortunately they claim it was on market at a period of time, it never has been we built 16 years ago, they’ve changed everything apart from the listing incorrection.

      I think I did it on their on the market website, they have a few different ones.

  • Ozbar Gain on 18/06/2024 - 11:08

    Hey mate, can you please put your address in property.com.au and compare the values there?
    I'm curious what you find. In my experience property.com.au is rather accurate and I don't think they rely solely on CoreLogic

    • Lord Fart Bucket on 19/06/2024 - 19:41
      +1

      I'll satisfy your curiousity… property.com.au doesn't realise there's a house on the land. It still does the valuation based on the land only.

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