Buyers and sellers are flocking to the Internet to search for homes, and get estimates of value on these properties all over the country. But, can these automated valuation models(AVMs) be trusted? I highly doubt it. I read a recent blog by a fellow associate, Ms. Debbie Reynolds of Clarksville, TN about a buyer who trusted and believed in one of those Zestimates instead of an appraiser. Debbie plainly pointed out to this buyer what all real estate professionals already know - a Zestimate is NOT the Bible on determining how much your home is worth.
These AVMs are widely used by sites like Zillow for price estimates. But, can you trust their accuracy and reliability? So, what exactly is an AVM? Automated valuation models plug in basic property characteristics like square footage, number of bedrooms and baths, publicly available data, local market information, and price trends into a computer algorithm to arrive at an estimated value for a property.
Different companies use their own AVMs, and each one relies on its own formula and data resources. Those that DO NOT use data from the local MLS that only REALTORS® have access to, may have less accurate information which further contributes to the unreliability and inconsistency of those estimates. Most of these models do not take into consideration the property condition. For example, two houses may have been built in the same year with very similar features, but one of them had been recently updated with new flooring, new fixtures, new appliances, remodeled kitchen and baths, while the other one still has that same old “popcorn” ceiling, wall paper, outdated appliances, and original carpet or tile flooring. Which one would you think would be worth more? But, these AVMs do not take that into consideration.
Yes, these automated valuation models have a few drawbacks which affects their accuracy, but as a Texas REALTOR®, I have access to a better tool, which we call the REALTORS® Valuation Model(RVM). Why is the RVM better? It uses better data, as the vast majority of MLSs in Texas authorize their data for RVMs. Consequently, a RVM is consistently more accurate than other AVMs. Texas REALTORS access the RVMs through the REALTORS® Property Resource, which is a comprehensive database of properties only available to members of the National Association of REALTORS®.
To get help with pricing, negotiations, and all other parts of your real estate transaction, a Texas REALTOR® is your best resource. Call Jerry Today at 210-789-4216. Visit my website to find Homes For Sale in and around the San Antonio area. Sellers can also find out How Much Their Homes Are Worth?
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