How Reliable is an AVM?

Some lenders and property owners are relying on Automated Valuation Models (AVMs) to determine property values. These computers rely on data gathered from a hodge podge of sources (some shockingly unreliable), mix the data up and then spit out a “value”. Simply put, relying on that data instead of a professional appraiser can result in disaster.

Here are 3 things AVMs can’t tell you:

1. Is the house even there? A computer can’t even drive by a house to see if it’s actually located where it’s supposed to be, has four walls and a roof, and really is a four bedroom split level and not a one bedroom shack.

2. Does the property have unique features that may add or subtract to the value? So a computer returns an estimated value of $150,000. Did it account for the sewage treatment station next door? The recent kitchen renovation? The school district? The desirability of its tree-lined street versus the next street over?

3. What makes the comparables “comparable”? A computer might compare your subject property to another property with similar square footage sold three months ago a quarter of a mile away. Even if that “comparable” property is in a different, less desirable school district, fronts a four-lane, 55 M.P.H. street, and is flood-prone. Or even if the property was sold under duress, such as in a divorce situation, or not at arm’s length, such as to a family member. A computer simply does not know all the adjustments that might need to be made to a “comparable” property’s sales price.

Rely on a us for an accurate appraisal of your property. We are professional appraisers with years of experience in all of Tampa Bay. No computer in India can compare!