For millions of Canadians, the home‑search journey often starts on REALTOR.ca—Canada’s largest real estate platform—and continues across consumer portals and brokerage sites. Along the way, many homeowners encounter online valuation widgets (AVMs) from data apps and brokerages (e.g., HouseSigma, Zolo, and others) that promise an instant estimate of value. The appeal is obvious: quick, free, and convenient.
A quick caution before we go further: even the best‑known U.S. portals frame their AVMs as starting points, not appraisals—and high‑profile misses have made headlines.1 The lesson applies in Canada too: an automated number is helpful for curiosity, but risky as a pricing strategy.
In this article, we'll examine how these powerful algorithms work, reveal the data behind their wildly varying accuracy rates, identify what they systematically miss, and show why local human expertise remains irreplaceable when precision—and your equity—matters most.
How These Algorithms Actually Calculate Your Home's Value
Automated Valuation Models are algorithms designed to crunch massive amounts of data in seconds.3 Think of them as sophisticated calculators—impressive in computational power, but limited by the quality and completeness of their inputs.
These systems analyze public records, tax assessments, recent comparable sales, and basic property characteristics like bedrooms, bathrooms, and square footage.4 For standard properties with plenty of recent comparable sales, this data-driven approach can produce reasonable estimates.
But here's the fundamental limitation that shapes everything else we'll discuss: these models rely purely on historical data and never actually visit your property. They're backward-looking by design, using what sold yesterday to predict what might sell tomorrow, and while an algorithm can tell you that your home has three bedrooms, it cannot tell you that the primary suite has stunning morning light that makes buyers fall in love.
