A walkthrough of RP Data, a property-data service used for due diligence. The speaker shows how to use the automated valuation model to estimate property value, explains forecast standard deviation and bank thresholds, and demonstrates re-running valuations to model renovations like adding a bedroom.
Chapters
So if you decide to go down the paid tools route, then you might want to use RP data for your property due diligence. And I just want to show you how you could use that with a couple of the tools that they have available. So let's jump into a property here. I've pulled up a property. I think by far the tool that I like the most is the avm, the valuation report. And what happens here is you can pull up the information and this is really the information that a lot of the banks use to decide whether they have a full valuation, a curbside valuation, or. Or whether the estimate or the contract of sale is good enough. So we go in here, we just substantiate the information we have. We're going to say this is for modeling purposes and we say, get avm. Now this is just indicative of what the price might be for this property and up comes our automated valuation. So maybe if you've got a lender who's actually ordering a valuation for a refinance or for a purchase, they'll actually use this tool to decide whether they send a valuer out there or whether they do a curbside valuation or they accept the contract of sale. So this can be really powerful. It kind of gives you an insight into the information that the lenders are using as well. So up comes this report and it says for this property, the estimated value is $462,000. They've got a range in there and this forecast standard deviation, FSD is really important. So it's less than 10% pretty much. The banks are going to accept a number within this range between 10 and 15%. They might organize a curbside valuation and over 15% they're going to get a valuer out to substantiate the price. But this is interesting. Now here's a way that you can actually use this tool if you're a bit of a renovator, so you can jump back into this property, you can organise another avm, but this time you might say, hey, I want to add a bedroom to this property and the renovation is going to make it much better. Once again, you're going to run this for modeling purposes and up comes your report that says if you added a bedroom and you actually had a better renovation, renovation on this property, the estimated value would be around $516,000. So you get kind of an opportunity to do your pre feasibility before renovation and before even purchase to find out if there's enough of a scope for you to actually do a renovation. And Maybe add a bedroom into this property. Now I'm just looking at a high level of these tools. If you want a more in depth tutorial, go to the bonus section, RP Data tutorial. And I go into a lot more detail here, but I'm really keen to just show you in the property due dilig area some of the tools that I use and I think are really handy if you want to actually use a paid service. So one of the other things that we actually look at is the sales history. So let's just jump back into this property and have a look at the sales history. So you can see here, if you actually go into a property itself, you're going to come up with all the pictures of the property. They've got a date for when the last pictures were taken, which is usually the last time it was either rented or sold. So we get a feel for. Look at this, this kitchen for instance. You could definitely renovate this. So gives us information about when it was last sold. Settlement date 2014. Normal sale. We've got some information here about the land valuation. 365,000. You may or may not get some ownership information based on privacy in specific states, but you've got some property features. Lock up garage two, the type of roof. You've got some listing information. Now you can say show more here. And this is usually the last part of the information that the real estate agent put onto the website. And this is just being scraped from that and the information put down and you've got sales history. So we can see here the transfer date, the sale type and the sale price. And you may even find the vendor's name there. This is really handy information. You get an idea for what the person bought the property for. Depending on the year. You can actually determine based on the growth in the area, how much the property has gone up in value and maybe their expectations. You can even use it to estimate maybe what their loan was originally. So I've used this type of technique in the past sale data to go in and use it for negotiations when I'm actually negotiating a property on the market at the time. So I can have a look and make some estimates. If the property has been owned for a very long period of time, for instance, the owner has a lot of equity in it. Yes, they want to fair market value, but they may not be as stringent on their price that they start at as what they're going to finish at if they've had the property for a long period of time and they have a lot of built up equity. So there's a lot of information here that you can use. There's the on the market history for sale information. So you can see it's back on the market now. It's listed price is $4.65 of interest. It sold the year before for $4.82. So potentially this could be a low price to get some interest in and they expect to sell it a lot higher or be that for some reason they're selling it a year on because there's some problem with the property. So this really gives you a bit of information before you go into a lot of detail and do a full checklist on this property, a bit of information on what might be happening behind the scenes. So as you can see, the on market history for rent, there's no data here, so it might mean that it's an owner occupied property, for instance. So you can gather a lot of information by just drilling down into the property detail in this RP Data tool. So if you want more information, as I said, I just wanted to cover off on a high level some of the real great little tools that I use here. There's so many different tools. Jump into the bonus section. Go through the whole RP Data tutorial if you're looking to maybe purchase this tool. Remember we've negotiated a great national discount for you so that you can use this tool. And yeah, we've got the tutorials to help you out.
