Are AI Property Valuations Accurate
When it comes to selling your home, knowing what it’s really worth is one of the most important steps. Many sellers now turn to online valuation tools powered by artificial intelligence (AI) to get a quick answer. These are known as Automated Valuation Models, or AVMs.
They’re fast, free, and seem convenient on the surface. But growing evidence suggests they’re far from accurate and relying on them entirely could cause a whole host of problems for sellers.
Recent research from Alto, a leading estate agency software platform, found that nine in ten estate agents believe AVMs are undervaluing properties
believe AVMs are undervaluing properties. That means homeowners may be unknowingly putting their homes on the market for less than they’re truly worth.
So, what’s going wrong with these tools?
What Are AI Property Valuation Tools?
AI valuation tools, or AVMs, use algorithms and data to estimate how much your home is worth.
They usually pull information from public sources, such as:
• Past sale prices in the area
• Local property trends
• Square footage
• Number of bedrooms or bathrooms
• EPC ratings and other basic features
The goal is to give you an instant estimate based on similar homes nearby. While this can work as a rough guide, it often misses key factors that make your property unique and those can make a huge difference to the final price.
Where AI Valuations Go Wrong
AVMs are based on data and data only. That means they can’t walk around your house, ask questions, or notice the finer details. And this is where problems begin.
According to the agents surveyed by Alto:
• 87 percent said AVMs routinely undervalue homes
• 73 percent admitted they don’t fully trust the tools they’re using
• 28 percent regularly increase AI valuations by £10,001 to £20,000
• 10 percent said they often have to bump them up by more than £20,000
The biggest issue is that AI cannot see or understand:
• Recent improvements or renovations, like new kitchens or bathrooms
• Unique features that make your home more desirable, such as a south-facing garden or
original period details
• The true condition of the home, inside and out
• Quiet roads, local community in an area, or other lifestyle perks buyers genuinely value.
AVMs also tend to struggle with certain types of properties, including:
• Homes in rural areas, where data is less consistent
• Houses in rapidly changing or transitional neighbourhoods
• Properties with loft conversions, extensions, or modern upgrades
• Unique or character homes that don’t fit the local ‘average’
One in five agents believe AI models strongly undervalue homes in the North and in rural or lower income areas. That bias can cause huge discrepancies, especially when properties are priced purely based on postcode averages or incomplete sales data.
The Risks of Relying on AVMs
Sellers are often drawn to AI tools because they’re quick and give a sense of control. But a poor valuation can set the entire sale off on the wrong foot.
Here’s what can happen when a home is undervalued by AVMs:
Relying on an inaccurate AI valuation can steer your sale in the wrong direction. It often attracts bargain hunters rather than serious buyers, meaning the interest you generate may not translate into genuine offers.
As a result, your home can end up sitting on the market for longer than it should, which in turn raises doubts among future viewers. Sellers in this position frequently feel pressured to drop the price, even if the original valuation was already too low. When you factor in how personal and emotional selling a home can be, these missteps can cause real frustration.
Why Local Knowledge Still Matters
AI can’t walk into your home. It can’t assess the details. Maybe you have recently put in brand new oak flooring, had the kitchen refurbished or installed a garden room at the back of the property. It doesn’t know that your quiet cul-de-sac is hugely sought-after by young families or that the south facing garden is rare in your postcode.
That’s why local estate agents still play a critical role. A good agent brings the local knowledge and detailed market insight, and a human understanding of what makes your home stand out. They speak to buyers every day. They know what people are looking for, what’s selling fast, and what homes are struggling to sell and why.
What a Good Agent Will Consider (That AI Often Misses)
• Unique features like a loft conversion or garden office
• Quality of local schools and proximity to transport links
• Buyer demand in your specific neighbourhood
• The feel, flow, and presentation of your home
• How your property compares to others recently sold nearby
• Condition and upgrade history of the property
• Real-time trends like rising interest in energy efficiency or remote working setups
These details can’t be scraped from a database or guessed by an algorithm. They need human interpretation. That’s the value of working with a professional who genuinely knows the local market.
Getting It Right from the Start
Valuing your home properly from day one sets the tone for the whole sale. A fair and accurate price attracts the right buyers, builds momentum, and often leads to stronger offers. Overvaluing can lead to silence. Undervaluing can cost you thousands.
If you’re thinking of selling, it’s worth getting a professional valuation from a local agent who’ll come out, look around, and talk you through their reasoning. Many will offer this for free and without obligation.
