Price Prediction
What goes into a price prediction Learn the process
How it Works
The AI-powered Price Prediction Tool enhances property valuation accuracy by integrating advanced CMA data and MLS inputs. It calculates precise price per square foot using comparable sales from nearby properties, adjusting predictions based on updates, geographical factors, and market trends. By gathering detailed data, such as sale prices and square footage from similar homes, the AI predicts the target property’s value with increased precision. For example, a target property of 2,310 sq ft may have an estimated value of $161,738 at an average price of $70 per square foot, with adjustments for recent updates and market conditions.
In short
Price Prediction Process
The AI-powered price prediction tool retrieves sale prices and square footage from five comparable properties to calculate a precise price per square foot, adjusts for property updates and market trends, and predicts the target property’s value with accuracy, offering realtors a reliable and efficient valuation method.
How it works? DEEP DIVE !
Advanced CMA Integration
Enhanced Accuracy: The tool uses the same data inputs as a traditional Comparative Market Analysis (CMA) but applies AI-driven calculations to increase precision.Comprehensive Data: Pulls sale prices from comparable properties in the neighborhood to inform its predictions.
Accurate Price Per Square Foot
Precision Calculations: Based on the total square footage of comparable properties, the AI calculates a highly accurate price per square foot, offering a more reliable basis for valuation.MLS Data Integration
Property-Specific Information: AI collects detailed property data from MLS, including images, historical information, and when the house was built.Update-Based Adjustments: The AI assesses whether the property has been updated in the last 5 or 10 years. Depending on the quality and recency of the updates, the AI either increases or decreases the predicted value.
Geographical and Location-Based Factors:
Location-Specific Adjustments: The AI takes into account the geographical location, including specific factors from Perk County and other areas, to fine-tune its price predictions.Color-Coded Results: Comparable's with a likeness of over 80% are highlighted with a green box, while those with lower similarity (below 80%) are displayed in yellow, making it easy to identify the most relevant comps.
Gather Sale Prices of Comparable Houses
AI retrieves sale prices from five comparable properties within the same or nearby neighborhoods to inform the price prediction.Example:
House 1: $167,876 (Same neighborhood)
House 2: $160,893 (Same neighborhood)
House 3: $164,786 (0.25 miles away)
House 4: $165,089 (0.75 miles away)
House 5: $156,490 (1 mile away)
Total Sale Price: $815,134
Calculate Total Square Footage
The total square footage of these five properties is summed to provide a basis for the price per square foot calculation.Example:
House 1: 2,300 sq ft
House 2: 2,234 sq ft
House 3: 2,464 sq ft
House 4: 2,346 sq ft
House 5: 2,298 sq ft
Total Square Footage: 11,642 sq ft
Determine Price Per Square Foot
Divide the total sale price by the total square footage.Example: $815,134 / 11,642 sq ft ≈ $70.02 per sq ft
Predict the Price of the Target Property
Multiply the target property’s square footage by the calculated price per square foot to predict its value.Example: If the target property is 2,310 sq ft, the predicted price is approximately $161,738.
Additional Adjustments
Property Updates: AI analyzes the first eight property pictures to determine whether any recent updates or renovations were made. If updates are detected, the predicted price is increased by 10%.Market Trends: The AI adjusts the price based on monthly market trends provided by MLS, reflecting market conditions within the property’s county, adding or subtracting value as necessary.
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