Have you recently seen an estimated value for homes when you're exploring the internet? Have you ever heard of an AVM and wondered what it is? Maybe you saw an AVM or RVM in the Realtor Property Resource, RPR, or maybe when you're using Realist and see CoreLogic’s RealAVM?
An AVM, or automated valuation model, is simply a computerized estimate of a home’s value that a lender might use to begin determining its value. AVMs are efficient, effective and essential tools in loan manufacturing. AVMs help expedite processes, lower costs and minimize risk. It includes nearby sales (“comparables”), property characteristics (such as number of beds and baths), and sales trends to arrive at a pretty close estimate of what a home is probably worth compared to others that are listed or sold nearby. When choosing an AVM, it's important to consider coverage, vendor reputation, current technology, accuracy, and price.
AVMs are not intended as an official appraisal of a home. That requires a trained professional to visit the home personally to determine what it uniquely has to offer. Is property located on a lake? Has it been recently remodeled with new cabinets, carpets and paint? These extra touches certainly add value that AVMs can’t calculate, but overall an AVM is surprisingly accurate when you’re tracking the ongoing change to a home’s value.
If your clients want as close a sense of their home’s true value as possible, have them contact you, the real estate agent. That’s what you do for a living!
* This does not apply to the Zestimate on Zillow