Many people are interested in understanding how our estimation works and what the estimate is based on. Here are answers to the most common questions regarding our estimate.
Does the estimate provide a recommended asking price or an estimate of the market value of the apartment?
The price that the estimate gives is based on actual transactions and reflects the actual market value of the apartment. However, no one will be able to tell the actual market value precisely in advance, as it is only revealed when the apartment is put on the market and offers are made. Some of our users have acknowledged that our price is lower than the prices of similar apartments on sale on housing portals. It is important to remember that the prices shown on the portals are asking prices. The apartments may be slightly overpriced to give the sellers a room for bargaining. Of course, this is not always so straightforward, as sometimes the reported asking price can be well below the assumed market value. The purpose of this pricing tactic is to attract more interest and build momentum for the bidding phase.
Does the estimate take into account renovations or the financial situation of the housing company?
The estimate does not yet take into account some detailed information about building or housing company. Major future renovations, especially pipe renovations, are only visible in the price estimate based on the year the building was built. Past renovations will gradually appear as new sales observations are collected. Renovations in the apartment itself are visible when the condition review is done.
Why is the estimate different from my own understanding of prices in the neighbourhood?
Many may have an idea on what the value of their apartment is, based on their own or a neighbor's recent transaction. However, there are differences between apartments that affect the price, e.g. in what condition the apartment is, changes in price levels and random variation in prices. Our estimate is based on a mathematical model that takes these factors into account by generalizing the price-affecting attributes, price trends and takes into account the location of the apartment sufficiently accurately to give an accurate and reliable price estimate.
What does the expected price estimate interval describe?
In addition to price variation from demand, the price is also affected by qualitative factors and random variations. Qualitative factors, such as a good floor plan, a well-managed housing company or sea view, raises the price while negative factors lower the price. Temporary fluctuations can cause changes in both directions and are especially strong in areas where the demand is low. The estimate interval also describes the reliability of the estimate - the wider the price range, the less confident our price estimate is.
What describes the expected sales time interval?
The sales time interval describes the expected time period for selling the apartment. The time is based on where the apartment is located and how long sales times for similar apartments have been in the same area. The intervals are calculated so that a quarter of similar apartments are sold for a shorter time than the lower limit and a quarter of the apartments are sold for a longer time than the higher limit. Sales times vary widely, and you should not entirely rely on forecasts and analyzes.
For what types of buildings and in what areas does the estimate work?
The estimate works all over Finland for apartments in house companies, including multi-storey buildings, terraced houses and semi-detached houses. It works best in areas where there are many transactions and the market is efficient, in other words growing areas with a lot of multi-storey, but even in more remote areas, the estimate should work reasonably.
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