What is an A.V.M.?
What does an A.V.M. tell me?
How accurate is an A.V.M.?
Is an A.V.M. the same as an appraisal?
A.V.M. Analysis Vs. Appraisal (Table)

 

What is an A.V.M.?
Automated Valuation Model (A.V.M.) Analysis is known by a number of aliases, including the following:

An A.V.M. Analysis involves a computerized analysis of a large volume of sales and property record information from within your neighborhood and the surrounding market area. The analysis attempts to find market trends and relationships between sale prices and an array of important factors such as Location, Heated Area, and various amenities such as swimming pools, car storage, fireplaces, etc., and then relates those trends back to your home to produce an estimate of it's value on the open market. (Back to Top)

What does an A.V.M. Tell me about my home's value?
An A.V.M. Analysis typically indicates the average sale price of homes that are similar to yours in terms of size (GLA), location, and major amenities. (Back to Top)

How accurate is an A.V.M.?
The accuracy of an A.V.M. Analysis will vary depending upon those characteristics which cannot be measured by computer analysis. These characteristics include the condition of your home, landscaping, any special features not catalogued in public records, and interior finish, among many others. The closer your home is to the average home in this regard the more accurate the A.V.M. Analysis will be. Regardless, an A.V.M. Analysis gives a relatively reliable indication of recent sale prices for homes similar to yours within and surrounding your neighborhood. (Back to Top)

Is an AVM the same as an Appraisal?
No! Although appraisers initially consider a large volume of data in each assignment, they then select a much smaller subset of the most applicable comparable sales, closely similar in as many aspects as possible to the home they are appraising. After investigating each comparable sale they apply adjustments to the sale price of each to compensate for any differences in relation to the subject property.

Those adjustments can only be formulated with a detailed knowledge of both the subject property (typically obtained by interior and exterior inspection) and the comparable sales (by exterior inspection and analysis of detailed property information contained in public and sales agent records). The in-depth knowledge of both subject and comparable sales means that an appraisal typically has a much higher level of accuracy than an A.V.M. Analysis

An appraisal is usually conducted by a State licensed and certified individual who has passed multiple rigorous exams and completed an internship prior to receiving their certification. They are required to conduct their analysis in strict conformance with the Uniform Standards of Professional Appraisal Practice (USPAP) and can be held liable in both civil and criminal courts for errors or fraudulent work. The appraiser uses his or her experience and judgment to interpret market data and discern trends in order to arrive at an Opinion of Market Value.

The experience and interpretive skill of an appraiser is never used in an A.V.M. Analysis. Instead, the analysis relies upon quantity of data rather than quality. An A.V.M. Analysis implements complex algorithms run by computers which are very efficient at sorting, sifting and analyzing large volumes of data to identify patterns and trends used to determine an estimation of value.

The performance of an A.V.M. Analysis is not subject to government regulation or oversight, and acceptance of the A.V.M. Analysis generally constitutes a release of the provider from any liability for financial or other losses incurred subsequently by any party relying upon the results of the A.V.M. Analysis (Back to Top)

The following table summarizes the major differences between an A.V.M. Analysis and an appraisal:

		A.V.M.	Appraisal
Inspection of Subject	-	No	Yes - Interior/Exterior
Inspection of Sales	-	No	Yes - Exterior
Detail of Data Analyzed	-	Low	High
Quantity of Data Analyzed	-	Large	Smaller
Accuracy	-	Moderate	Higher
Can be used as basis for Loan Origination	-	No	Yes
Performed by a State-Certified Appraiser	-	No	Yes
Provider liable for errors	-	No	Yes
Government regulated	-	No	Yes

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