What's It Worth? CMA's vs. AVMs
It is estimated that 80% of homeowners are starting their shopping online, eager to take advantage of publicly accessible listings, photo tours and other online tools to acquire information about the homes and neighborhoods they are interested in. the proliferation of online tools available to these highly motivated home buyers continues to increase
Readers of this newsletter are familiar with the Comparable Market Analysis (CMA) is to determine the market value of a property, by comparing it to similar, recently sold properties nearby. the market value represents an educated estimate, based on an agent's personal experience and knowledge of the area and recent market activity.
Many online real estate sites are promoting the AVM as a replacement for the CMA. An AVM (Automated Valuation Model) is an automated software tool that establishes a market value for a property by aggregating information harvested from county and tax records, census data, and proprietary databases. AVM's have been a popular resource in the lending ccommunity for a while, and are utilized to validate and supplement the findings of traditional appraisals when financing requires expedited turn-arounds. AVM reports typically include property valuation, comparable sales, and demographic information, supposedly providing up-to-date information on demand; their use is increasing in real estate.
Unfortunately, AVMs can only perform their calculations based on published information which may or may not be complete or accurate. And, the computers generating the AVM can not see the view, or the quality of construction of that recent kitchen remodel, or assess first-hand a home's condition. It takes a trained eye and someone who knows what buyers are looking for in a given market to make an accurate appraisal of a home's worth.
Where AVMs are most accurate in highly uniform neighborhoods such as condominiums or developments with identical floor plans, they are inaccurate in areas where homes have different floor plans, features and desirability. An agent who has personally toured recently sold homes nearby will be able to report on the desirability, condition, and both the listing and ultimate sale price of competing homes; an AVM based on county records will only be able to report the sale price.
Not surprisingly, a dispute has broken out between traditional home appraisers and the data companies that harvest publicly accessible information for use in AVMs, and claim that appraisal reports are systematically being looted of key information without permission or compensation. They say that while AVMs are cheaper than appraisals, you get what you pay for.
While AVMs can provide a home buyer with supplemental information, a CMA provides a seller with an accurate, informed and realistic valuation of their home..filtered through the experienced eyes of an neighborhood specialist whose job it is to know the inventory and stay current.
Although we will certainly see AVMs moving forward, current technology is no replacement for an experienced professional when it comes to putting a value on the your home.
Readers of this newsletter are familiar with the Comparable Market Analysis (CMA) is to determine the market value of a property, by comparing it to similar, recently sold properties nearby. the market value represents an educated estimate, based on an agent's personal experience and knowledge of the area and recent market activity.
Many online real estate sites are promoting the AVM as a replacement for the CMA. An AVM (Automated Valuation Model) is an automated software tool that establishes a market value for a property by aggregating information harvested from county and tax records, census data, and proprietary databases. AVM's have been a popular resource in the lending ccommunity for a while, and are utilized to validate and supplement the findings of traditional appraisals when financing requires expedited turn-arounds. AVM reports typically include property valuation, comparable sales, and demographic information, supposedly providing up-to-date information on demand; their use is increasing in real estate.
Unfortunately, AVMs can only perform their calculations based on published information which may or may not be complete or accurate. And, the computers generating the AVM can not see the view, or the quality of construction of that recent kitchen remodel, or assess first-hand a home's condition. It takes a trained eye and someone who knows what buyers are looking for in a given market to make an accurate appraisal of a home's worth.
Where AVMs are most accurate in highly uniform neighborhoods such as condominiums or developments with identical floor plans, they are inaccurate in areas where homes have different floor plans, features and desirability. An agent who has personally toured recently sold homes nearby will be able to report on the desirability, condition, and both the listing and ultimate sale price of competing homes; an AVM based on county records will only be able to report the sale price.
Not surprisingly, a dispute has broken out between traditional home appraisers and the data companies that harvest publicly accessible information for use in AVMs, and claim that appraisal reports are systematically being looted of key information without permission or compensation. They say that while AVMs are cheaper than appraisals, you get what you pay for.
While AVMs can provide a home buyer with supplemental information, a CMA provides a seller with an accurate, informed and realistic valuation of their home..filtered through the experienced eyes of an neighborhood specialist whose job it is to know the inventory and stay current.
Although we will certainly see AVMs moving forward, current technology is no replacement for an experienced professional when it comes to putting a value on the your home.
