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cobran20

SMH: The app that predicts property prices

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Now you can predict the unaffordability factor!

 

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Every homebuyer knows the pain of missing out on their dream home thanks to an underquoted sale price.

 
Enter Josh Rowe and RealAs, a website and app built for house-hunters who want to know the real value of a property. Using an algorithm developed by machine-learning and data-mining academics at RMIT University, RealAs claims to predict property values with a 5 per cent rate of accuracy.
 
Chief executive Rowe says even he was initially sceptical of the science behind the predictive algorithm.
 
"I didn't believe the algorithm at first," he says. "I literally thought that I was just applying some sort of percentage on top of the figure.
 
"It wasn't until I went to an auction in my suburb. The house was listed for $600,000 – RealAs predicted $680,000 and it sold for $690,000.
 
"RealAs predictions keep changing over time and they include sales data and current market data."
 
The business was launched in August, but has already won a major innovation award, including a $40,000 cash prize.
 
RealAs won the Westpac Innovation Challenge in November – a joint competition run by Westpac and venture technology accelerator BlueChilli.
 
Westpac head of digital business banking Kalpana Gee says RealAs has the potential to disrupt not only the resident property market, but the commercial property market too.
 
"This is exactly the kind of leading-edge, future-ready idea we were looking for," she says. "It has the potential to completely change the way our commercial real estate customers do business."
 
The $40,000 prize will be used to create the RealAs app for Android devices; the six-month placement in the BlueChilli accelerator program will help to further develop its website and app.
 
Rowe says the start-up's quick success has its investors hopeful of a global expansion.
 
"We'd love RealAs to be the TripAdvisor of real estate … a platform where people can have discussions about property.
 
"We'd love to expand globally. A few people have emailed us from the US to ask us when we're bringing it over there."
 
Overseas competitors include US online sites Zillow and Trulia, which both offer more than just property valuations: both sites provide property sale listings, financial calculators, mortgage rates and information articles.
 
Locally, RealAs takes on the likes of online property giant REA Group, which operates realestate.com.au.
 
But the start-up has a long way to go – it attracts 10,000 unique monthly visitors; realestate.com.au gets 40 million monthly visits.
 
REA Group chief product officer Henry Ruiz says online real estate businesses have empowered homebuyers, making them better informed and more confident to buy.
 
"Technology has had an enormous impact on the real estate market," Ruiz says.
 
"Early on, we realised that the desire of everyday Australians to consume real estate content in a digital format was only going to grow, especially as data bandwidth and speed improved over the years."
 
RealAs is already making money from advertising on its site, but Rowe says it has yet to break even on its $500,000 capital investment. However, the start-up's investors are aiming to turn a profit within the first 12 months.
 
RealAs is free for all users, who just need to register an email address and log in. Rowe says there are no plans to change the free-for-all model, but there are plans to launch an investor version in the future.
 
RealAs was founded by veteran buyers' advocate David Morrell, a vocal opponent of underquoting by dodgy real estate agents. He is joined by three others on the board, including Rowe and Hawthorn Football Club president Andrew Newbold.
 
Experienced Melbourne real estate agent Greg Hocking says the site is sure to change Australia's real estate market.
 
"David's been a real crusader over many years and he's taken his app to further his aims to, in his own sweet way, tidy up underquoting," he says.
 
"Underquoting is the bane of many buyers' lives. It's something the authorities and government bodies have basically failed to do."
 
Predicting sales prices isn't an exact science, which means some properties are inadvertently underquoted by agents, Hocking says.
 
"David's app wouldn't go anywhere helping people on those sales, but as a guide it's helpful."

 

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I love how this could disrupt the REA cartel control over (mis)information.   Looks like it needs time to season, mostly blank results and the search engine seemed to struggle.   The App is pretty cool as you can use the map function, but again more blank (black) than predictive (Blue).  Will be interesting to see how this goes over time.  Looks like results can be populated by anyone logged in (?).   We'll see...

Edited by Dose

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Does it go exponential after 7-10 years? If not, it's no good :)

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Does it go exponential after 7-10 years? If not, it's no good :)

it supports scientific notation to extrapolate future prices.  :rolleyes:

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it supports scientific notation to extrapolate future prices.  :rolleyes:

 

  :laugh:

 

The RealAs app became self aware on Jan 18th 2015. From that point onward all the screen would render was "Property to the Moon!!!"

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Based on my recent experience house shopping, Realas was pretty close most of the time.

 

For the 5-6 properties we missed out on/almost bought, it was within around $5,000 - $10,000 of the actual sold price each time.

 

Naturally it way overpriced the particular property we bought however, because we lowballed the crap out of a stale listing  :thumbup:

 

Dead Money

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we lowballed the crap out of a stale listing  :thumbup:

 

Dead Money

What do you defines as lowballed the crap out of? Which city? Do you think it was way overpriced or did you get a bargain?

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Well, I probably did exaggerate a little :)

 

We purchased in an outer suburb of Melbourne. The property (Property A) was listed at $X +, and in my opinion should have fetched around $X + $45,000 based on comparable properties in the area. There are more than 100 listings in that suburb, so determining value is pretty easy. Realas estimated $X + $49,000.

 

We settled on $X + $10,000

 

So in my view, we purchased around $35,000 - $39,000 under current market value. So I'm no property genius, but still - $35,000 is a big chunk of change on our budget!

 

It's a bit of a funny story actually, we were juggling up between buying one of two properties, each through different agents. The second property (Property B ) was around $50,000 cheaper than the one we went with, better build quality but a fair bit smaller. It unfolded like this:

 

Day 1. We see Property B on Saturday, and like it. We start to fish around for what the Vendors would realistically accept. The property is in our price range. We take a Section 32, with the probable intent of placing an offer on Monday.

 

Day 3. On Sunday night we decide to do a last minute shop around on realestate.com to see if anything else catches our fancy. Property A had caught our eye before, but we had dismissed it as outside our realistic price range. But this time I checked the listing date on http://www.suburbview.com/, and found it was around 100 days old. We decide that if they would accept X + $10,000 - we'd be interested.

 

Day 4. The next day I call the Property A agent, and say "We are interested in Property A, but can only offer X + $10,000 maximum. Would the vendors consider such an offer, or are we wasting everyone's time?" The agent confers with the vendors, calls back, and says the vendors would consider such an offer. So we book a private inspection that night.

We see Property A, and like it. We take a section 32. We tell the agent straight out that we are tossing up between this property, and another cheaper one in the area. (I didn't say the address, but I did mention one somewhat distinctive feature)

We take a second look (private inspection) at Property B the same night. We tell the agent straight out that we are tossing up between this property, and another more expensive one in the area. He asks what the list price is, we tell him $X+. He says based on that list price there's no chance we would get it within our budget. 

 

 

 

Day 5. We ask for and receive a second private inspection on Property A. We make an offer of $X + $10,000 - with a firm statement that if the offer is rejected, we plan to buy the other house instead. 

That night, after a few hours of waiting, the PROPERTY B agent SMS's us, to congratulate us on purchasing a house!  :laugh:

About an hour later, the Property A agent calls to confirm the offer has been grudgingly accepted. :rolleyes:

 

Keep in mind that the two agents work for different companies, so I can only presume that Property A agent looked through other local listings, figured out which house was the other contender, and called the Property B agent to ask him what he thought our limit was!

 

In hindsight we're glad we were telling both agents the same story. I guess it made our "this is our final offer" claim more believable......

 

And yes, we had pre-approval to go higher, but who the hell wants to spend to the max the bank will lend?

 

Dead Money

Edited by Dead Money

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