Automated valuations are a useful starting bracket and a poor final answer. They work from what is recorded, and a large share of what determines value never gets recorded anywhere.
What the model cannot see
Condition, at any level of detail. The quality of a renovation as opposed to the fact that one happened. Layout and flow. Whether the lot backs onto green space or a service road. Noise, orientation and light. Which side of a school boundary the address falls on when the boundary runs mid-block.
Why micro-location breaks the estimate
Models smooth across an area. Value does not smooth. Two houses four hundred feet apart can sit in different brackets because of a boundary, a busy road or a view, and the model averages that difference away.
How to use one properly
Treat the estimate as a range, then adjust with recent comparable sales you have actually looked at, condition assessed honestly, and any local factor the data would not capture. That is the number worth pricing against.
The estimate is where a valuation starts. It is not where it should end.
Read the full breakdown on HouseCashers.com