Those estimates do NOT "run our ability to sell." Most serious buyers don't take those estimates seriously. Instead, serious buyers look at comps. They listen to real estate professionals. They use their common sense.
You're worried about the tire-kickers who have no intention of buying. Stop it.
Price your home fairly. Market it well. It'll sell.
Incidentally, if it didn't sell at $525,000, it likely was overpriced. OK, it probably isn't worth as little at $375,000. But it would have been interesting to see what might have happened at $499,000.
To answer your specific question, I imagine Trulia's algorithm looks at listing prices of homes on the market, assuming those are generally fairly close to market value. Most of the time, they are. Then, once it went off the market, it again looked at comps in your area and came up with a figure of $375,000.
But, for gosh sakes, don't worry about Trulia's estimates (or Zillow's, or anyone else's). The fact is: Serious buyers don't pay attention to them.
Hope that helps.
The 'just market value' often published by taxing authorities.
Those relying on these numbers, as Don suggests, are not serious buyers. They are professional, lifetime lookers. Serious buyers rely on serious resources. Entertainment websites like Zillow and Trulia are for the sole use of those seeking entertainment.
Don't be confused.
The pros know how to get a home sold. That skill has NO REALIANCE on these websites WHATSOEVER! However, it DOES rely on the homeonwer making the correct decisions based on the real market data presented.
Best of Sucess to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL