Why Online Estimates Are Not Accurate

I’m sure you have seen many people and companies stating that online estimates are not accurate. I will explain in depth WHY online estimates are not accurate and the proper use for them. I’ll also give a short overview of an appraisal and how important it is to your home’s final sale price. First, I’d like to say that estimates offered by websites like Redfin and Zillow do a good job based on the factors they can account for. That is also the problem. Redfin, Zillow, and other online home value estimators cannot take in all the factors. Websites use algorithms or formulas but cannot account for what I call “the human touch”.

Algorithms and Their Rigidity

These algorithms measure the facts and they do that well. They account for the number of square footage, baths, bedrooms, year built, and some even take in the basic market trends in the area. Those numerical facts are all an algorithm can use for evaluation. To my knowledge, they’ve yet to embed them with artificial intelligence.

Online estimation programs cannot measure nuances like how updated your home is compared to available homes in the area or if your backyard is wonderfully landscaped with a firepit. There is a range a home can sell for depending on market and inventory. Most estimates fail to give you an accurate range and some only give you a single number. An algorithm also does not account for your personal needs. Factors like how quickly do you want to sell? What home repairs you are or are not willing to make? How available is your home for showings? These all contribute to your home’s value.

The Human Touch

The human touch includes all the reasons humanity can be sure we won’t be replaced by robots. First and foremost is the current market. The Real Estate market fluctuates year to year depending on the inventory and the season. Additionally, there are submarkets based on the city your home is in and the demographic your homes appeal to. These market conditions play a huge part in the range your home will sell for. Some online estimators account for the market but to do so they must heavily simplify its complexity.

accurate estimate

Subconscious Impressions

Really any nuance affecting your home’s value needs the human touch. A big one is the first impression of your home. One of my former clients summed this up brilliantly. We were looking at a home but when he tried to open the front door it was stuck. After a bit of jiggling and force, he successfully opened the door. He then turned to me to say he doesn’t really want to buy a home he has to fight to get in every day. His very first impression of the home was an annoyance.

On the other hand, if your entryway is clean with floors and paints in good condition your first impression is a strong one. Another nuance is how move-in ready your home looks. Most buyers try to imagine themselves in your home. Having a move-in ready home helps them envision themselves there. This prompts people to think of positive possibilities instead of adding another item on their to-do list. It might seem unimportant but subconscious opinions play into how your home is marketable.


Next is location, location, location. The repetition is funny but also with purpose. There are many factors effecting the locational value of your home. It is not just the literal location of your home. Locational value is determined by the school district, the distance to large streets, the distance to shopping, the appeal of the city, the appeal of the neighborhood, and many other elements. The location also decides what houses your home will be compared to by buyers and the appraisal officer who has the final say in your home’s price.


For those who don’t know, an appraisal is one of the final steps when closing on a home. A trained appraiser evaluates your home’s condition and compares the house to homes in your neighborhood sold within the past 6 months to a year. A good appraiser uses accurate homes for comparison and a good Realtor knows when they don’t. The appraiser then gives their opinion on the home’s worth.

The reason I call this the final say is that the appraiser’s price opinion is what the bank refers to in the last stages of granting a mortgage. Basically, if an appraisal comes in too low or high the bank will want to alter the loan. I’ve seen time and time again where the seller and buyer have to renegotiate a price because of the appraisal. The appraisal of your home and the inspection may bring surprises Redfin and Zillow could never account for. In fact, Redfin and Zillow say it best:

Redfin, “But the Redfin Estimate is just a starting point—it is not an appraisal or a substitute for the expert pricing advice of your Real Estate agent.”

Zillow, “The Zestimate® home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value.”

There is a reason an appraiser circles your home, turns on every faucet and crawls through your attic. The little things add up and will affect what your home will sell for. The in-depth conditional factors of your home are crucial in determining the price. Add this to the constantly shifting market and market factors specific to your location. Only about 25% of your home’s value is based on factual details like the number of bedrooms and the amount of finished SqFt. Everything else is dependent on the human touch. Online sources make very educated estimates, but it’s just that: an estimate.

Learn more about what determines a home’s value by reading these posts:

1: 5 Ways to Showcase Your Home for Successful Showings

2: Your House Didn’t Sell? 4 Factors To Consider Before Reselling

3: How We Determine Your Home’s Value

If you have any questions, please let me know, I’m always happy to help. You can give me a call at 612-889-6496 or send an email to [email protected].

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