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This question already has an answer here:

I logged into google hangouts at my mothers house, on her tablet, through her wifi. How can google give a address to a house eight miles away?

marked as duplicate by bmdixon, Dan Hulme Jul 22 '16 at 13:23

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It happens only when we share location without letting GPS find our exact location, generally before sending location you are supposed to wait until the location is clearly visible to you and its exactly where you're sitting.

You can share your location or where places are located with any of your conversations. To do so- On your Android device, open a new or existing Hangout. Tap Location Insert location. Type in a location or address: In the top right corner of the map, tap Search . Find your current location: In the bottom right corner of the map, tap Location Insert location. Tap Select this location. The location will send immediately.

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