Technology Promises Speed, but Does It Ensure Accuracy?
In a world where digitalization simplifies countless processes, property and asset valuation is increasingly influenced by algorithms and statistical models. But can an algorithm truly replace the expertise of an ANEVAR-certified valuer?
To answer this question, we must understand where technology’s advantages end and where a specialist’s intervention becomes indispensable.
1. How Does Automated Valuation Work?
To answer this question, we must understand where technology’s advantages end and where a specialist’s intervention becomes indispensable.
- Property size
- Location and year of construction
- Current sales listings on real estate websites
Based on these factors, the system generates an approximate value. However, this method has several major limitations:
- It does not consider property rights – An algorithm cannot verify cadastral documents, ongoing legal disputes, mortgages, or encumbrances affecting the property.
- It does not analyze market conditions – The data is sourced from public listings, which often do not reflect actual transaction prices.
- It does not physically inspect the property – Factors like building condition, finishing quality, exact location, or structural issues are not considered.
- It is not legally accepted for official transactions – Banks and financial institutions do not recognize automated valuations as a basis for granting loans.
2. A Certified Valuer: Precision, Analysis, and Expert Consultation
A certified valuer does not simply provide a number. They analyze each property in its legal, economic, and technical context, considering critical factors that an algorithm cannot interpret.
- Verification of legal documents – Identifying property rights, mortgages, easements, or other restrictions that influence real market value.
- Physical inspection – Assessing the actual construction quality, location specifics, and potential structural issues.
- Personalized consultation – Analyzing economic context, market trends, and asset-specific factors.
- Flexible valuation methods – Unlike algorithms, a valuer adapts their methodology depending on the valuation’s purpose (transactions, tax reporting, loan guarantees, etc.).
- Legal and financial acceptance – ANEVAR-certified valuations are officially recognized and can be used in financial transactions.
3. Key Differences Between an Algorithm and a Certified Valuer
| Criteria | Automated Valuation | Certified Valuer |
|---|---|---|
| Type of data used | General statistical data (size, location, construction year) | Comprehensive data (including cadastral records, mortgages, physical inspection) |
| Verification of property rights | ❌ Does not check cadastral documents, mortgages, or legal disputes | ✅ Analyzes documentation and legal restrictions |
| Physical inspection | ❌ None; analysis is based on generic data | ✅ The valuer physically inspects the property |
| Accuracy of the estimate | ❌ Can have large discrepancies from actual value | ✅ Estimated value has a low margin of error |
| Acceptance in financial transactions | ❌ Not recognized by banks and financial institutions | ✅ Accepted for loans, transactions, and tax purposes |
| Flexibility in methodology | ❌ Uses a fixed statistical model | ✅ Can adapt methods depending on valuation purpose |
| Market and economic context analysis | ❌ Does not interpret market trends, real demand, and supply | ✅ Integrates market analysis and economic trends |
4. Case Study: When Technology Leads to Misinterpretation
A client wanted to purchase an apartment in a 1995-built block. They used an automated valuation application, which estimated its value at €95,000, based on listed offers in the area.
Before proceeding with the purchase, they consulted a certified valuer. The physical inspection and document analysis revealed:
- The building had been classified as high seismic risk, significantly reducing its market value.
- The apartment required major renovations, which the algorithm failed to consider.
- Online listings were overestimated, and recent real transactions had closed at €85,000, not €95,000.
Final result? The valuer determined the real value at €80,000, saving the client €15,000 and preventing an overpriced purchase.
5. The Future of Valuation: Automation and Human Expertise, Not Automation vs. Expertise
Even though technology can support valuation by digitalizing certain processes, it cannot replace the expertise of a professional valuer.
Banks use automated systems for internal portfolio verification, but when it comes to initial property valuation and critical financial decisions, human expertise remains essential.
Automation may improve data collection and processing, but the final decision must always be based on human judgment and deep market understanding.
Conclusion: Smart Valuation Combines Data and Expertise
- If you need a quick and general estimate, an automated valuation app can be useful.
- If you need a precise, legally recognized valuation for financial decisions, a certified valuer is the only correct choice.
- The value of an asset is not just a number—it’s a combination of property rights, economic context, and unique market conditions.