AUSTRALIA Patents Act 1990 RESIDEX PTY LIMITED COMPLETE SPECIFICATION INNOVATION PATENT Invention Title: Real Estate Value Estimation The following statement is a full description of this invention including the best method of performing it known to us:- 2 Title Real Estate Value Estimation Technical Field 5 This invention concerns the estimation of real estate values. In particular it concerns a method for automatically providing an estimate of real estate values to an enquirer. Background Art 10 The determination of a value of a property is generally determined by comparing the property to other properties of like type and structure that have been recently sold. The value of the property would then be said to be the same or similar to the sale price of the like property which was recently sold. Residex uses a number of techniques to determine a value for every property in 15 each street it has on its data bases. These property values are statistical estimates and therefore there can be no certainty that any particular value for any particular property is certain to be correct. Nevertheless, Residex is able, at any particular point in time, to derive a distribution of property values for a street. This distribution is generated as a byproduct of the property value estimation methodology which is described in Patent 20 Application No.2003203821 "Valuation Exchange", and takes into account the sales history of properties on the street as well as growth in the market since those sales and various other factors that prove relevant in the estimation of property values. The street value distribution is a summing of the individual property value distributions in the street. 25 Disclosure of the Invention The invention is a method for automatically providing an estimate of a real estate value to an enquirer, comprising the steps of: storing values of real estate in a particular locality in a database; 30 displaying a user operable means of comparison by which the enquirer is able to indicate the relative value of a single property in the locality relative to others; registering the enquirer indication of relative value; interpreting the enquirer indication of relative value using the stored values to determine an estimate value; and 35 displaying the estimate value to the enquirer.
3 The invention provides a mechanism for the determination of the value of a property that allows any enquirer to form a view of a property's value quickly without the need to compare the property to recently sold properties. 5 The values may be stored as three separate points, for instance one point for the upper quartile value (25% of properties are estimated to have a value greater than this number), one point for the median value (50% of properties are estimated to have a value greater than this number) and one point for the lower quartile value (75% of properties are estimated to have a value greater than this number). 10 A curve may be fitted to the distribution for the street. The step of interpreting the enquirer indication of relative value using the distribution may include assigning the property a value on the curve. Displaying the value may involve displaying a value and tolerance, or a range of values. 15 The displayed value may be adjusted depending on the users history of indications of relative value. Some of the user indicated values may be compared with real sales figures to provide a check. 20 In further aspects the invention is an interactive website to automatically provide an estimate of a real estate value to an enquirer, wherein the website has an associated database that stores values of real estate in a particular locality and the website displays a user operable means of comparison by which the enquirer is able to indicate the relative value of a single property in a locality relative to the others in the street, and 25 the website has an associated processor to register the enquirer indicated relative value in order to interpret the enquirer indicated relative value using the distribution to determine a estimate value and to cause the website to display to the enquirer the estimated value. 30 In yet a further aspect the invention is software to operate such a website. Brief Description of the Drawings An example of the invention will now be described with reference to the accompanying drawings, in which: 35 Fig. I is a system diagram; and Fig. 2 is a flowchart.
4 Best Mode of the Invention Referring first to Fig. 1, an enquirer 10 accesses a computer 12 that is connected to the Internet 14 in order to obtain a real estate value estimate in accordance with the 5 invention. The estimates are calculated by a computer 16 that is connected to the Internet 14 and a database 18. The process for obtaining a real estate value estimate using the invention will now be described in reference to Fig. 2. Street value distributions of real estate are stored 20 in the database 18 as three separate points - the upper quartile value (25% of 10 properties are estimated to have a value greater than this number), the median value (50% of properties are estimated to have a value greater than this number) and the lower quartile value (75% of properties are estimated to have a value greater than this number). From previous analysis of the distribution of property sale prices a curve is fitted that both passes through the three particular points and is a plausible shape for a 15 distribution of property values in the street. An enquirer 10 may log in to the property estimation service available at a web site using computer 12. The enquirer 10 is prompted to enter the name of a street and suburb that the property which they seek an estimation for is located. The enquirer 10 is expected to have seen the property of interest and the surrounding properties in that 20 street. A user operable means of comparison is then displayed 22 to the enquirer 10 which the enquirer 10 uses to indicate the quality of the property relative to the other properties in the street. There are a number of different ways that this data can be entered and quantified. For example, a 'slider bar' can be displayed to the enquirer 10. The slider bar is labelled at one end 'worst in street' through 'typical property in street' 25 to 'best in street' at the other end. The enquirer 10 then enters 24 their estimation of the relative value of the property by using their mouse to drag a slider along the bar to the location they consider best represents the quality of the property. The input of the enquirer 10 is registered 26 by the computer system 16. Once the relative value is registered, the value of the property is automatically estimated by 30 interpreting 28 where that value lies within the street value distribution and returning the corresponding value. That is, if the user has indicated via the slider bar that the property is better than, say, 80% of properties in that street then we find the 80 'h percentile of the distribution (i.e. the amount for which 80% of property values in that street are lesser) and return that figure as our value estimate. 35 The calculated estimated value is then displayed 60 to the enquirer 10 on the computer 12. The value displayed may be a range of values which the true value of the 5 property is likely to fall within. Alternative, the value may be displayed with a tolerance, such as a percentage either side of the estimated value that the true value of the property is likely to fall within. It may be necessary to adjust the registered slider point relative value entered by 5 the enquirer 10 to allow for any biases that the enquirer 10 may have. For instance, an enquirer 10 may consistently overestimate the value of the property in the street, or be more inclined to point to extreme values. This would only evidence itself upon usage of the slider bar. If it did prove necessary, then an analysis of the value estimates produced by the slider bar comparison methodology compared to the value estimates 10 produced by other value estimation methodologies would enable quantification of the difference and allow for any bias that may exist, perhaps on a user-by-user basis, or alternatively on a more general basis. Optionally, actual sale data could also be entered into the database 18. The computer 16 could also identify recent sales which were in close proximity to the 15 property of interest and have calculated current day values which were within 10% of the selected value for the property are also displayed to the enquirer 10. It will be appreciated by persons skilled in the art that numerous variations and/or modifications may be made to the invention as shown in the specific embodiments without departing from the spirit or scope of the invention as broadly 20 described. The present embodiments are, therefore, to be considered in all respects as illustrative and not restrictive.