Why can’t AI (artificial intelligence) price real estate correctly?
It is true we have all sorts of tools we can use for putting a value on real estate. I use them sometimes but always in conjunction with my own analysis. My analysis is always closer to the actual sale price than any of the auto valuation tools.
Autobaluation tools are great for doing a rough estimate or a starting point for finding the value.
I have a lot of experience, more than 21 years of experience pricing houses and figuring out how much they will sell for. Experience is a great teacher.
There aren’t any two houses that are exactly the same, Even if they are very similar they are not on the same piece of land.
In addition, to tools and data experience, there are things that I can see and know and understand about how people use houses and how a house may command more or less money depending upon intangibles like landscaping and traffic.
The basics for pricing residential real estate is to find three comparables that are close by and that have sold recently. Often the comparable houses are similar but now exactly the same. The three biggest factors that will determine value are location, size, and condition.
Pricing a house requires a kind of fuzzy logic that artificial intelligence doesn’t have.
