Finding the answer is not as simple as typing your address into Zillow.
The AVM Conundrum
AVMs, or Automated Valuation Models, use computer algorithms to determine the value of a home. Zillow’s Zestimates are probably the most widely-recognized example of an AVM, but there are many others out there.
Problem is, they’re all using different data sets, with varying degrees of accuracy, to reach their conclusions. As a result, it’s not uncommon to find a wide range of different values on a single home.
For example, consider the home below. We looked at six different AVMs and, not surprisingly, came up with six different values:
- Chase – $318,000
- epraissal.com – $343,249
- NARRPR – $345,290
- Zillow.com – $358,028
- Homes.com – $363,900
- Realtor.com – $377,384
(Data as of December, 2016)
While some of the AVMs are relatively close to one another, there’s still a nearly $60,000 swing from the lowest to the highest. That’s not money any seller wants to leave on the table. And for some homes in newer neighborhoods, or less populous areas, the difference between AVMs can be even more striking.
What’s more, many of these AVMs don’t take some critical factors into account, including:
- Whether the home actually exists at the address, or if it is habitable (fires, floods and other damage/situations may mean a house is no longer available, and AVMs have no way to confirm this)
- Upgrades & improvements made to the home that can impact the value (kitchen/bath remodels, energy efficient windows/HVAC, etc.)
- Market conditions at the neighborhood level, including planned improvements that could impact value (new schools, roadways, shopping, etc.)
- Up-to-the-minute comparable sales (recorded sales data could take weeks, or even months, to get into any one AVM’s database)
A local Realtor®, on the other hand, will have access to the very latest sales data from the local MLS, as well as knowledge of current/future issues impacting local communities that could have an effect on values. That’s why a local real estate sales agent is your best resource for understanding the market value of your home.
If you’d like to discuss the market value of your home, contact us for a free market analysis.