Online real estate search and marketing firm Trulia is now generating automated property valuations for 50 million off-market homes, using a system that allows homeowners to add or edit property characteristics that can affect values.
"Trulia Estimates" use an automated valuation model (AVM) that takes into account recent sales information for other homes in the area, and property characteristics taken from public records including the number of bedrooms and square footage.
To ensure that only homeowners are making changes to property characteristics that affect "Trulia Estimates," only registered users will be permitted to make edits.
Homeowners can also provide feedback on the valuations generated by Trulia Estimates. Trulia says the more data it has, the more accurate Trulia Estimates will be.
Screenshot of Trulia Estimates generating a new valuation based on information provided by a homeowner.
Trulia’s measurements of the tool’s accuracy show a good deal of variation among the nearly 500 counties currently covered. While the median error is 10 percent or less in 58 counties, it exceeds 20 percent in 59 others.
Trulia measures accuracy by comparing actual sales prices for recently sold homes over a three-month period with Trulia Estimates at the start of the period.
In Greene County, N.Y., where the median error is 42.2 percent, 10.3 percent of Trulia estimates were accurate within 5 percent, 19.1 percent were accurate within 10 percent, and 27.9 percent were accurate within 20 percent. In other words, seven out of 10 estimates in Greene County were off by 20 percent or more.
At the other end of the scale, in Burleigh County, N.D., the median error of Trulia estimates is 5.4 percent. About half of Trulia Estimates were accurate to within 5 percent, 57.5 percent accurate within 10 percent, and 77.5 percent within 20 percent.
While Trulia Estimates "are a great starting point for consumers, these estimates do not replace the valuable expertise and local market knowledge provided by real estate professionals," the company said in announcing the national rollout of the new capabilities, which it began beta testing in September.
Each estimate also gives site visitors the option of contacting real estate agents who have paid Trulia to receive leads from consumers who would like to receive a professional estimate based on local comps, active listings, price trends and other factors.