Consumer NZ slams Homes.co.nz for real estate agents’ influence on price estimates

Consumer NZ has criticised Homes.co.nz for allegedly allowing real estate agents to influence its listings’ price estimates with their appraisals.

According to the organisation, a potential buyer claimed that the website did not indicate if a property’s price estimate had been influenced by the real estate agent trying to sell the property.

Homes.co.nz chief data scientist Tom Lintern argued that most listings on the website were not influenced by agents. However, when they were, the appraisals were fed into the site’s algorithms to create its HomesEstimate.

He confirmed that Homes.co.nz did not inform the potential buyer if the HomesEstimate had been influenced by a real estate agent’s appraisal, noting that the estimates were based on a “propriety formula” and calculated from “public data, registered valuers’ valuations, and real estate agent CMAs.”

He defended the website’s practice of allowing real estate agents to indicate estimate prices because they knew the properties and local market better than the website staff, although he confirmed that CMAs sometimes come below HomeEstimate prices if, for example, the home listed was in disrepair.

Still, considering the potential buyer’s complaint, Lintern said he would raise the issue internally with the property website to notify potential buyers when an agent’s appraisal had been used to form the estimates.

“It’s important to understand that agents do not manipulate prices, but rather use their professional opinion to give a market appraisal range,” Lintern added, as reported by Stuff.

Consumer NZ chief executive Jon Duffy stated that the Real Estate Agents Act requires agents to provide the vendor a written estimate of the expected price for the property before signing any agency agreement.