It depends on the area and its density and conformity of homes or condos. In My neighborhood typical tract homes, are similar in , age, physical size , lot sizes etc and Zillow-Red-Fin or other AVM ( Automated Valuation ) tools are often very close with a 2% to 5% variance. BUT when you get into less urban areas or when dealing with site built, custom or rural properties they are NOT accurate at all. I just ran one on my own property and it came back at a estimated value of $528,000. BUT then I went and looked at individual sales and some were in better condition, some had pools etc and so I would make adjustments for those and my quick analysis had me at a point of value of between $510,000 to $515,000. So the AMV -Zillow type tool was very good to use as a starting point. The Realtors use similar statistical tools that are incorporated into their MLS service and often use those numbers when they send out flyers and other advertising to home owners.
SO NOW you have to determine if your property fits into the box, if its site built, custom, unique, complex, located on land, the Automated valuation tools are worthless. As far as legality ( YES ) they are a computer generated model and not an appraisal. I suggest you go to google run your own property on a Zillow or Red-Fin and see what kind of estimates it comes out with. And then look at other sales in your neighborhood and see what kind of price variances you see. Remember these tools do not replace a good old fashioned appraisal, where your property is physically inspected and individual adjustments will be made for the positive and negative attributes of your home "V" other similar sales in your area.
