Look, we get it. You're curious about what your house is worth. So you pop your address into Zillow, Redfin, or Realtor.com, and boom—there's a number staring back at you. Maybe it's higher than you expected (nice!), or maybe it's lower (ouch). Either way, you're probably wondering if you can trust it.
Here's the short answer: No, you really can't.
And if you're thinking about selling your home, relying on those automated estimates could end up costing you serious money—or worse, leaving your house sitting on the market for months while you wonder what went wrong.
Let's talk about why these online estimates miss the mark, how they actually come up with those numbers, and what you should do instead.
How Do Zillow and Other Sites Calculate Home Values?
First off, it helps to understand what you're actually looking at when you see a "Zestimate" or similar valuation on these platforms. These aren't appraisals. They're not even close to what a real estate professional would tell you after walking through your home.
They're algorithms. Computer programs crunching publicly available data and spitting out a number.
Here's the basic process: These sites pull information from public records—things like your property's square footage, number of bedrooms and bathrooms, lot size, and when it was last sold. They look at recent sales in your area, tax assessments, and whatever other data they can scrape together. Then their algorithm tries to connect the dots and guess what your home might be worth.
Sounds reasonable enough, right? Except here's the problem: algorithms don't know your house. They've never been inside. They don't know that you completely renovated the kitchen last year with high-end appliances and custom cabinetry. They have no idea that your bathroom still has the original pink tile from 1967. They can't see that your neighbor three doors down—whose house sold for top dollar last month—has a completely finished basement while yours is just concrete and storage boxes.
These systems are making educated guesses based on incomplete information. And sometimes those guesses are way off.
Even Zillow admits their Zestimates have a median error rate of around 2% for homes currently on the market—which doesn't sound too bad until you realize that on a $400,000 home, that's potentially an $8,000 swing either direction. For off-market homes (which is probably what you're looking at if you're just starting to think about selling), that error rate jumps to nearly 7%. We're talking about a potential $28,000 difference on that same $400,000 house.
Would you make a major financial decision based on information that could be off by nearly 30 grand? Probably not.
What These Estimates Can't Account For
Beyond the basic data problems, automated valuations completely miss the human element of real estate. They can't factor in the stuff that actually matters to buyers.
Your home's condition, for instance. Maybe you've meticulously maintained everything, replacing the roof five years ago and updating the HVAC system. Or maybe things have been neglected and deferred maintenance is piling up. An algorithm treats both houses the same if they have the same specs on paper.
Location nuances? Forget about it. You might be on a quiet cul-de-sac while another "comparable" home sits on a busy street. Your backyard might have gorgeous sunset views while the house around the corner faces a parking lot. These details dramatically affect value, but they don't show up in public records.
Then there's the matter of improvements and upgrades. Sure, maybe the county assessor knows you added a bedroom. But do they know about the hardwood floors you refinished, the smart home system you installed, or the landscaping transformation that turned your yard into something out of a magazine? Nope.
Market momentum matters too. Real estate isn't static. What sold six months ago might not reflect what's happening right now. Maybe interest rates shifted. Maybe new employers moved into town. Maybe a dozen similar homes just hit the market, changing the competitive landscape. Algorithms are always playing catch-up with these real-time market dynamics.
The Danger of Pricing Based on Active Listings
Here's where things get really tricky for sellers. You might be tempted to check what similar homes are currently listed for in your neighborhood and price yours accordingly. After all, if the house down the street is asking $450,000, you should be in that ballpark too, right?
Wrong.
Mike Oddo, CEO of HouseJet, explains why this approach can backfire: "Pricing your home based on what's currently on the market or what hasn't sold is a mistake that costs sellers thousands of dollars every single day. Here's what people don't realize—appraisers don't use active listings as comparables. They use actual sales. So if you're pricing based on homes that are sitting there without selling, you might be pricing based on homes that are overpriced themselves. That's how you end up with your house sitting on the market for months, eventually selling for less than it should have, or not selling at all. The only way to get a true value for your home is to have an expert real estate agent come in and give you a legitimate estimate based on comparable sales, current market conditions, and potential market changes on the horizon."
Think about it: A listing price is just what someone hopes to get. It's not what buyers are actually willing to pay. Those homes might be priced too high, which is exactly why they're still available. If you match their prices, you're making the same mistake they did.
When a bank sends an appraiser to value a home for a mortgage, that appraiser looks at closed sales—homes that actually sold and for how much. Not asking prices. Not hopeful numbers. Real transactions. If your price doesn't align with those sold comparables, the appraisal might come in low, and suddenly your sale falls apart because the buyer can't get financing.
What You Should Do Instead
So if you can't trust the online estimates and you shouldn't price based on current listings, what's a seller supposed to do?
Get a real human expert involved. Specifically, get a knowledgeable real estate agent to provide a comparative market analysis (CMA).
A good agent will actually come to your house. They'll walk through every room, noticing the details that matter. They'll see your upgrades and your problem areas. They'll understand how your home compares to others in the neighborhood because they know those homes too—maybe they've even been inside them.
Then they'll dig into recent sales data, looking at homes similar to yours that have actually closed in the past few months. They'll adjust for differences. They'll factor in current market trends and buyer demand. They'll consider homes currently under contract (which won't show up in public data yet but indicate where the market is headed). They'll think about seasonality, interest rates, local economic factors, and what's coming down the pipeline.
This is what a professional valuation looks like. It's informed by data but enhanced by experience, local knowledge, and an understanding of what buyers in your specific market are actually looking for right now.
The Bottom Line According to HouseJet
Those online home value estimates are fine for casual curiosity. Want a ballpark idea of what your neighbor's house might be worth? Sure, check Zillow. Wondering if your home value has generally gone up or down over the years? Those tools can give you a rough sense.
But if you're actually planning to sell? Those numbers aren't just unreliable—they're potentially expensive to trust. Price too high based on an inflated estimate, and your home sits on the market getting stale while buyers pass you by. Price too low, and you leave money on the table.
Before you make one of the biggest financial decisions of your life, talk to a real estate professional who can give you an accurate picture of what your home is truly worth in today's market. That conversation costs you nothing, and the pricing precision it provides could be worth tens of thousands of dollars.
Your home deserves better than an algorithm's best guess. Get the real answer.
