We all know the movie.  Arnold is a machine sent from the future to kill off the saving grace for the human race, because computers had found a conscience.  This obviously hasn't come to fruition, or are we in the beginning stages of computer programs being given to much authority. 

If your credit score is good enough, I'm sorry, great enough (and wow, nowadays it seems as though it better be), lenders will run an automated valuation model on a home and presto, without even looking at the home the mechanism spits out a number.  This number will be the guide on whether or not they will loan money, as well as how much they will loan.

Then we have the publicly accessible AVMs like Z......, that completely mislead the users.  I know in my less than a decade old subdivision, there has never been a sale over $320,000, but Z...... had a home valued at over $400,000 at the height of the market in late 2005, and now at $239,000.  My neighborhood may have been hit with a rollback, but wow according to Z...... they've come back 40%, when in actuality the market has seen about a 20% decline in values.  Let's just say that if the subject in question had all the most elaborate upgrades we could imagine, the market would more than likely see these as overimprovements and superadequacies and would not pay $400,000+ even in the height of the market.  Where does the computer even notice improvements or depreciation or anything other than $/SqFt and proximity to the subject.  It seems to fail to factor in age, lot size, or location?  Publicly Accessible AVMs do nothing more than mislead the Public.  They are a detriment to the industry on so many levels.  A seller may tend to terminate his relationship with the agent if they believe their home is severely over/underpriced all because of an AVM.

They take away work from the appraiser, or better yet an appraiser is "no longer needed" by a bank/lender because their work did not come close to that of the AVM, therefore the appraiser is the one who didn't do the appropriate research.  Can an AVM tell if a closed sale was typical (in this market, do they recognize foreclosures as "typical transactions")?  Lets get real.  Lending money on what a computer program tells you, without verification that the home still even exists, doesn't sound like a good economic philosophy, but yet AVMs are becoming more accepted.

Beware of the AVM, especially if they start to say things like, "I'll be Back".