"The reality is that no one has perfect data," said Bradley Inman, chief executive of HomeGain.com. "There are some subtle differences in data, but no one can change the fact that certain states don't have data and some people don't report changes in data."
Seven states, including Texas, New Mexico, Kansas, Mississippi, Indiana, Wyoming and Utah, do not make property records available to the public. In states that make information available, such as California, there can be a 60-to-90-day lag between a home's sale and when the information is recorded.
In addition, Web sites that compare home price trends in a given area may skew a home's price by evaluating it against homes that are larger or smaller, or have different amenities.
"A home with avocado carpet, paisley wallpaper and a cottage cheese ceiling that's dark and dingy could be valued the same as a home down the street that's absolutely beautiful with architectural significance," said David Offer, an agent at Prudential-John Aaroe Realty and Associates in Brentwood.
The computer doesn't know, for instance, that Shilkret lives at a T-intersection on a busy street. Or that she's a few blocks away from an expansive view of the Brookside Golf Course and the Rose Bowl. Or that her tree-lined street meanders into the hills shortly after it passes her house.
Real estate agents don't like the idea of clients relying on AVMs alone to set their home's value.
Fred Sands, chairman and chief executive officer of Fred Sands Realtors, says he's had clients whose homes have been undervalued by home valuation sites. He adds it's important that homeowners consult with an agent when they're viewing comps, because agents are able to weed out bad data.
"We find that 20% to 25% of the data we get for comps is erroneous," Sands said.
How does a consumer know if a home valuation site is providing accurate information?
Experts suggest that consumers gauge how complete public records data is for their area by closely evaluating comps provided by home valuation sites.
If the comps include details, such as the year the home was built, its square footage, its previous sale price and the number of bedrooms and baths, then it's likely public records for that area are complete, said Lewis Allen, chief executive and president of Activesoft Technologies, an Irvine-based AVM provider.
Consumers should also check the size of the databases used by each Web site. For example, domania.com says it has access to 78% of the public records for homes sold nationwide over the last five to eight years. But the company doesn't have property information from numerous states.
It's also helpful to review the area that comparables for each home are pulled from (i.e. the same street, neighborhood or ZIP Code.) This information helps to determine if homes in this radius are similar to each other or not, experts say.
"If your house is homogenous to the housing stock in your market, then it's probably a good estimate of what its value is," said Forrest Pafenberg, director of real estate finance research at the National Assn. of Realtors. "If you live in a market where homes are atypical, using that information is misleading and might give you comfort where you shouldn't have it."
Because accurate property data is hard to come by in some areas, most AVMs have an average hit rate of 60%--meaning only a little more than one in two queries comes up with an answer. This rate is likely to be higher in urban areas where there's more information, and lower in rural neighborhoods.
On the plus side, AVMs can help stem bias on the part of real estate agents.
"While an agent has a fiduciary responsibility to represent the buyer, they don't get paid unless that buyer actually purchases something," Karris said, "so some would say the agent has an incentive to encourage that buyer to pay a high price."
Like real estate agents, many appraisers view online AVMs as a threat, and are trying to develop AVM databases of their own. The industry's largest trade group, the Appraisal Institute, unveiled its "Appraisal Institute Residential Database" this month. The database is expected to have 12 million records by next month.