Nine times out of ten people check their home value on Zillow or Trulia prior to calling a real estate agent. I personally think these sites are great considering they get it right about 50% of the time. Even more so, when you consider that an algorithm is trying to determine a very complex ordeal such as the value of a home, so props to them!

Why do they miss the mark the other 50% of the time?

I don’t really know, and I doubt anyone else truly knows, but here is my educated guess: Because they can only see what’s on the outside of the property through the eyes in the sky – aka satellites –  and they can only analyze what can be found on public records such as number of beds, number of baths, square footage, etc.

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Therefore, the two reasons Zillow gets home values right half the time are the following:

1. Often, public records are incorrect

This can happen when updates, such as expansion, added bathroom or bedrooms, that are yet not recorded in public records.

For example, say you added a family room to your property. You may have expanded to the covered patio to do so. This adds more value to your home since the living square footage under A/C has significantly increased. But this information will most likely not be reflected on public property records, which is where these sites get their information. Therefore, the lack of accurate information can distort what’s reported in sites like Zillow.

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2. These sites can’t see the interior of your home

These sites can only determine the value by the exterior and what has been sold in that neighborhood in recent years. Therefore, if your home has interior upgrades, or modifications that would significantly add value to the property, it would not consider these factors.

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