Value House
Estimates against appraisals
Automated valuation

The number online is a model. It has never seen your house.

An automated valuation model reads records and recent sales, then predicts. That is genuinely useful, right up until it is not.

Here is what those estimates are built from, where they reliably go wrong, and the point at which you need a person instead.

An aerial view looking straight down at a suburban residential street, rows of houses with driveways, lawns and mature trees.
Side by side

Two very different things

One is a prediction from data. The other is an opinion from a person who is accountable for it.

Automated estimate

Algorithm
  • Built fromPublic records, tax data, prior listings, recent nearby sales
  • Sees the propertyNo. It has never been inside or outside
  • Knows conditionNo. It assumes condition from age and records
  • Signed byNobody
  • Accepted by a lenderNot as an appraisal
  • CostsNothing

Appraisal

Licensed person
  • Built fromInspection, measurement, comparable sales and adjustments
  • Sees the propertyYes, depending on the scope ordered
  • Knows conditionYes, first hand where inspected
  • Signed byA licensed or certified appraiser, with a licence number
  • Accepted by a lenderYes, that is its purpose
  • CostsA fee, paid by the borrower on a loan
The failure modes

Where a model goes wrong, predictably

A model is only as good as the records behind it. It goes wrong in the same places every time.

Condition. Two houses built the same year on the same street can be thirty years apart in condition. Records cannot tell them apart. A person can.

Unpermitted or unrecorded work. A finished basement that never reached the county file simply does not exist to the model. Neither does a bad addition.

Thin markets. Rural property, acreage, and anything unusual has few genuine comparable sales. Models degrade fast when the nearest similar sale is not similar.

Rapid change. Records lag. In a market that has moved quickly, the model is describing a few months ago.

The moment it stops being a curiosity

Checking an estimate for interest costs you nothing. The trouble starts when a number with no inspection behind it gets used for a decision with money attached. Pricing a listing. Settling an estate. Splitting assets in a divorce. Appealing a tax assessment. Deciding whether to remove an appraisal contingency.

At that point what you need is not a better estimate. It is somebody licensed who has actually been in the building and will put their name on the number.

Certified appraisers

When you need the signed version

These three take private appraisal work, not only lender orders.

Arizona

Tyler Kane of TyCorp Inc, a Certified Residential Appraiser and FHA approved, covering north Phoenix and the northeast Valley.

Get a real Phoenix valuation
Utah

Weston Groll of Apex Appraising, Utah Certified Residential, covering 52 cities in 8 counties.

Utah appraisal with Weston Groll
Nationwide

Pocket Appraisal, for residential valuation work anywhere in the country.

Pocket Appraisal
Questions

Common questions

What is an AVM?
An automated valuation model. It is software that estimates a property value from public records, tax data, prior listings and recent nearby sales. Every free online home value tool is one. It carries no inspection, no signature and no professional liability.
Why is the online estimate different from my appraisal?
Because they are built from different information. The model works from records and cannot see condition, finish quality, layout problems or unrecorded work. An appraiser inspects, measures and selects comparable sales by judgment rather than by proximity alone. Where the records are incomplete, the two will diverge.
Can I use an online estimate for a loan?
Not in place of an appraisal. Some lenders use automated valuation internally to decide how much appraisal scope a file needs, but the estimate on a consumer website is not a substitute for a signed appraisal report and will not be accepted as one.
Are online estimates useless then?
No, and it would be unfair to say so. For a standard house in a dense, well recorded neighbourhood with plenty of recent sales, they can land close, and they are a reasonable free starting point. The problem is that they give no signal about when they are wrong, and the cases where they are most wrong are often the cases that matter most.
Get in touch

Estimate looks off?

Tell us what the online number said and what you think is missing from it.