How do you determine your estimated values for the properties listed on your site?
We use a commercial grade automated valuation model (AVM) based on public records data to determine estimated home values for properties scheduled for auction. We have qualified this AVM and find it to be quite good, but an AVM does not account for the context of the property, condition or other factors which may affect the home value. An AVM is no substitute for local knowledge of an area and an overall understanding of the condition of the property.
Online Support Rep.
So FR’s AVM assume “average” condition? Does it encompass details such as BR size, lot size, extra amenities (pool, etc.) if listed in county/public records? Is it better than online AVM;s e.g. zillow, etc.?
No AVM, should not be used as anything other than a rough estimate to help narrow down the properties you are looking at. Most do a decent job of putting you in the right ball park, but that’s it. To my knowledge they all take into account things like square footage, bedrooms and lot size if listed in public records. I personally did a bake off of about 10 AVM’s a few years back hoping to find one that I could use for more “automated” investing. I concluded that there weren’t. None that I have reviewed can tell the value difference between two houses across the street from each other with the difference being one on the freeway and one on a greenbelt. Huge actual difference, zero AVM difference. From there they all vary a bit, but bottom line is that they are great for doing searches to find homes in a general price range, or determine a rough estimate of equity, but I wouldn’t use them for much more than that.