INCLINE VILLAGE, Nev. — With all of the changes in the real estate markets around America during the past few years, the accuracy of computer-generated property values has become even more of a challenge. Internet-based services such as Zillow, House Values and others try to use an algorithm to analyze recent sales in a particular ZIP code and then generate an approximate valuation for a particular property.

You may have tried doing this for your own home and been surprised at the estimated value. In a micro market such as Incline Village where we have virtually all custom homes, I don't think you can really get an accurate valuation this way. Doing a comparable sales analysis is a rather complicated and time-consuming project here. There are many nuances to each property such as quality of construction, driveway access, materials and finishes, location, view, setting, and other intangibles. Two properties next door to each other can have important differences in their respective locations (view, road noise, sun exposure, etc) that have a huge impact on their fair market values.

I recently took a look at the Zillow website and checked out a few properties in my neighborhood that are not currently for sale. These are properties I am intimately familiar with and have a pretty good idea as to what they would reasonably sell for in our current market. The Zestimate (or Zillow Estimate) was routinely off by anywhere from 30% to 50% on the low side. I also hunted around their website to try and find the margin of error chart for each county that they used to have and I was unable to locate it.

When I was first concerned about this issue in 2009 I took the liberty of contacting the marketing department at Zillow. I asked them if they could please stop using their computerized algorithm in places with custom homes such as Incline Village. After a long conversation with a nice gentleman in their marketing department named Drew Myers, he said to me, "Custom homes are something you can't put an algorithm to." So why are they continuing to do business as usual?

I was hoping that by now these various house valuation services would only provide raw statistical data from actual sales and not try to provide what effectively amounts to as their own computer-generated appraisals. But that is not the case and these uninformed property valuations are a great disservice to buyers and sellers of Incline Village and Crystal Bay real estate.

One of the reasons that the National Association of Realtors is working hard to build a nationwide database is so that agents and their clients can have access to the detailed historical sales data for every property in the country. It will take another few years for this project to be completed, but if it's successful the end result will be a wealth of information at our fingertips.

Anyone buying or selling property in Incline Village should consider computerized valuation services on the Internet to be nothing more than an enjoyable parlor game. Ask a licensed real estate agent or an appraiser to provide you with the comparable sales data for your home or condo if you are thinking of putting it on the market. Then you can analyze the statistics to determine a value for your property and establish the asking price when putting it up for sale.

— Don Kanare is a Realtor for Lakeshore Realty welcoming comments at DonKanare@Hotmail.com.