Issues that can glitch online estimates and appraisal values for your home

Automated home valuations are now very commonplace… both at online sites such as Zillow and Trulia and with tools used by banks and Realtors. Often they are quite accurate… but not always.


Here are some common issues that can cause computerized estimates to be inaccurate.

You live in an older area

Computer algorithms are based on characteristics found in public records, and the older your home and neighborhood the better the chances of inaccurate online data… which may be even more flawed if homes have stayed in the same family for generations so public records haven't been updated by sales data.

Your neighborhood is near dissimilar neighborhoods

Sometimes just crossing the street can make a big difference in neighborhoods. Different school districts can do the same thing. Most automated home valuations pull data based on a geographic radius. Without a real person who knows the area to make adjustments in comparable selections for these dissimilarities values can be skewed.

Your house has had extensive renovations without permits and it hasn't been sold for a long time

Public records get updated from permits and sales, but if significant upgrades and changes have been made to your home that are not reflected in permits or sales your property's characteristics may be inaccurate in public records. This doesn't necessarily mean that permits were not pulled, but if the permits for the whole projects are not reflected online computers may not know the improvements exist.

You are in a rapidly rising or falling market

Automated valuations are based on recent sales, which are not likely to be accurate if your market has been  rising or falling a lot in recent months. Normal market fluctuations can also make it difficult for appraisals on sales coming out of our winter season when sales are fewer and prices are lower.

Homes don't sell very often in your neighborhood

Sometimes it is very difficult to get enough comparable sales to establish value in extremely stable neighborhoods where homes aren't sold very often. This stability is a good indicator of a strong neighborhood but it doesn't help getting accurate valuations.

Your home has unique features

Automated valuations are based on standard features in the neighborhood where it is located. If your home style and features are unique to your neighborhood, computers usually have no way of knowing about them to take them into consideration. Unique features can also be hard to value because they may have a high value for one homeowner and a low value for another.

Online estimates can be quite accurate in areas where homes are quite similar and where there is steady turnover so data is updated by recent sales, but don't rely on online values. The more varied, stable, unique your neighborhood or home, the more challenges arise in establishing value for both sales and appraisals.

Sharlene Hensrud, RE/MAX Results - Minneapolis-St. Paul Realtor

The team at HomesMSPSharleneJohnAngela Minneapolis-St. Paul Buyer's Agents


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I love what I do! Highly insightful, analytical and creative, there is nothing I love more than helping you find the right solution for your real estate transition. My mission is to serve my clients with honesty and integrity, exceeding their expectations in service and support… and to help others by donating a portion of every transaction to Habitat for Humanity.

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