An AVM (Automated Valuation Model) is a computer-generated estimate of a property's value based on data such as recent sales in the area, public records, and local market trends. While AVMs can be a useful tool for getting a ballpark estimate of a property's value, they have limitations and may not always provide a precise estimate of the property's true market value.
"Consumer grade" AVMs have been around for nearly 20 years, Eppraisal and Zillow's Zestimate being two of the first. Since that time, a plethora of AVMs have come onto the market including more complex and sophisticated AVMs that are "commercial grade". This type of AVM is often used by banks, insurance companies and other large businesses to help make financial decisions.
Eppraisal has always conveyed the value you see from an AVM is a great starting point for finding your home's value. For years, Eppraisal had also shown Zillow's Zestimate on our site. Our though process being, the more information a consumer has, the better their ability to make a sound decision. We treat it as a great starting point for a discussion with a real estate agent before placing your home on the market. Here are a couple of reasons why you'll want to have a real estate agent estimate the value of your home, rather than relying solely on an AVM:
A real estate agent has local market knowledge
An agent has first-hand knowledge of the local real estate market, including recent sales and current market trends. This knowledge can help them provide a more accurate estimate of your home's value based on current market conditions.
An agent can physically inspect your property
An AVM can only estimate your home's value based on data such as square footage and number of bedrooms and bathrooms. An agent can physically inspect your property, taking into account factors such as the condition of the home, any recent renovations or updates, and other unique features that may affect its value.
A real estate agent can provide personalized advice
An agent can provide personalized advice on how to improve your home's value before listing it on the market. They can also provide guidance on pricing strategies based on current market conditions, comparable sales in the area, and other factors.
An agent can help you navigate the selling process
Selling a home can be a complicated process, and a real estate agent can help guide you through it. They will provide advice on staging your home, marketing it to potential buyers, negotiating offers, and more.
Overall, while an AVM is a useful tool for a ballpark estimate of your home's value, it's best to have an agent's feedback before deciding the price to list your home. Local market knowledge, a physical inspection of the property, and personalized advice are not something an AVM provides.
On the other side of the equation, real estate agents often use AVMs for lead generation. Eppraisal recently launched a widget for real estate and mortgage professionals to capture leads by presenting Eppraisal estimated home values to potential clients. Interested in learning more? Reach out to the team and we'll be happy to help with your 30-day free trial.