Smart valuations, how does this work?

Walk through a valuation of your home within 15 minutes, it can be done thanks to the wonders of artificial intelligence. What happens behind the scenes of Realo Estimate®?

Anyone planning to sell their home today or looking for a new home is quickly faced with the uncertainty of today's property market. Getting a good idea of how much a property is worth today is essential but not always so easy. Realo offers the solution to get an up-to-date and precise valuation with just a few clicks, right from your couch.

What is the Realo Estimate®?

The Realo Estimation® is the expected sales price and rental price for an average property in a certain neighbourhood and with certain characteristics (plot size, number of bedrooms and bathrooms, ...). After going through a few steps where extra information about a property can be entered, the algorithm automatically and quickly calculates a current valuation.

How does Realo Estimation® work?

To arrive at an accurate estimate of a property's asking price, Realo has developed a complex model based on artificial intelligence. Depending on the property type, the model learns what the best possible combination of different sources of information is to get as close as possible to the real asking price. The model then uses that knowledge to start estimating new properties.

Data sources used at Realo Estimation®.

The valuation is based on three types of variables. On the one hand, information about the property itself, such as habitable area, number of bedrooms and bathrooms, energy consumption, year of construction and other factors. On the other hand, information is gathered about the neighbourhood, such as the average selling price, the location and the price per square metre of building land. Finally, Realo itself also calculates some key indicators, such as the M-score (mobility score) showing the property's distance to the motorway, schools, public transport and so on.

Among other things, the algorithm uses (1) information from the land register, (2) identifies flood risk areas, (3) collects available neighbourhood data and (4) calculates the distance to different modes of transport.

On average, the difference between a Realo Estimate and the asking price is less than 10%, better than the usual accuracy in the industry. The accuracy of the Realo Estimate depends on the amount of data points available for each property. The more information about about a property, the more accurate the estimate. To enable more accurate estimates, estate agents or property owners can customise their own property information on Realo.

Realo works with leading companies in various industries, such as KBC, Matexi, the Flemish Government, Hillewaere Vastgoed, Vivium, Logic-Immo and other partners, who rely on our estimates on a daily basis.

Realo Estimation® as a starting point

However, the estimation tool cannot take into account the quality of recent renovations, materials used, degree of finishing or the property's individuality. Therefore, future users are advised to always supplement the Realo Estimator® with an estimate of their property by a recognised real estate agent or estimator. Brokers who also work with the estimation tool themselves will thus no longer have to deal with time-consuming manual analyses and can instead focus on the details that can make the difference in the asking price. Prospective buyers or tenants, in turn, are advised to visit the property themselves to better understand any discrepancy between the Realo Estimate® and the sale or rental price.

Start your smart estimation here.

Fabrice Luyckx
Data Storyteller