What a time to be alive! We live in a day in age where everything is available with the push of a button. Even the specific details about your most treasured possession, your home, are available with a quick google search of your property address. One popular topic among the capabilities of the online world and the real estate industry is the concept of the AVM (Automated Valuation Model).
AVMs are essentially statistics, data, and algorithms combined to create a readily available estimate as to what any specific property value could be in any given market.
Most are familiar with Zillow’s Zestimate, which is one of the more popular AVM tools out there. Compare and relate the AVM and Zestimate to the tissue paper industry and Kleenex is the brand that is most commonly associated with it. There are a lot of real estate websites that all have AVMs available to the public.
Question is, what is the best use for them?
AVM tools are useful. They are best used for getting a quick general estimate as to what value range your property could potentially fall in. You are minutes away from being able to google your home address or any property address and having a slew of real estate websites pop up that will offer some level of information on the property and some will offer an AVM tool that gives an estimated value. These websites are run by very powerful companies, so the process for data and analytics is there to ensure a high level of performance. However, I would limit the use of the AVM tool to be a casual resource and not as the final determination of what the value of your home should be.
The obvious missing element to the AVM is that there is no human element to the analysis. Zillow or any other of these websites have not seen your home in person. They are strictly comparing it to the available data in and around your neighborhood and market. Although I mentioned that the companies that run these websites are very powerful, they are not powerful enough to have even 1 individual for every single market to be able to assess and update the estimates for each property on a rolling basis. Their algorithm does this, but it does not have a human element to it. The Zestimate doesn’t know about your recent new flooring upstairs or an updated bathroom, or that your 17-year-old cat has a weak bladder and lives in the family room, and how all of this combined could affect the overall market value for your home.
There is a simple conclusion for reviewing the AVM tool for real estate, especially in the Rochester NY real estate market… if you need a general ballpark estimate as to what your home is worth but are not making any decisions with that data, then tools like the Zestimate can be a good thing to get that quick information from. However, if you are needing to make any decisions around real estate that you own or are considering it will be best to consult with an actual human professional that has extensive knowledge and experience with similar property types in that location. Even better, get multiple opinions from professionals in your local area and evaluate everything as a whole. The on-demand world that we live in is good for a lot of things, but let’s not use it too loosely with one of the more important decisions in your life!
For ADA assistance, please email email@example.com. If you experience difficulty in accessing any part of this website, email us, and we will work with you to provide the information you seek through an alternate communication method.