The Evolution of the AVM
Love ’em or hate ’em, AVMs are a mainstay in how buyers and industry professionals gauge the worth of a property. It’s been that way since Zillow first introduced the world to the AVM by way of the Zestimate.
But a lot has changed since the early days of AVMs. Today’s AVMs are not just for consumers. They power a host of businesses that know how to use the information they provide – and the ATTOM AVM powered by ATTOM Data Solutions is at the core of the evolution of valuation technology.
OK, First Off, What is AVM?
An AVM (automated valuation model) is an algorithm that calculates a set of data points on a property – like what year it was built, the size of the property, its features, and the values of similar properties in the neighborhood – and comes up with an estimate of what that property might be worth on the market.
Buyers, sellers, and real estate agents looking to identify valuable neighborhoods love AVMs because they offer a quick, concrete snapshot of what a property might sell for. Lenders, however, found AVMs less useful for building loan packages. But ATTOM Data Solutions has changed that.
The Problem with Most AVMs
AVMs evolved in two varieties – free and expensive. For someone trying to figure out what they might spend on a home in a given area, free AVMs can be a good start. But as with anything, you get what you pay for. Free consumer-grade AVMs are built to homogenize information as much as possible, which makes them hardly accurate enough for a lender to build a good loan package from or for an appraiser to know the real value of a home.
Expensive AVMs are much more accurate – and much more expansive – but their sticker prices tend to keep them out of reach of all but the wealthiest institutions. So either way, medium to large lenders and appraisers have had to make hard choices when considering whether to use AVM data.
The ATTOM Solution
ATTOM Data has evolved the automated valuation model with the ATTOM AVM – a flexible, cost-effective, lender-grade AVM which can come as a stand-alone value or be flexible and included with other ATTOM data deliverables using match & append and marketing lists as well as part of a bulk file, custom list or API. The ATTOM AVM uses multiple valuation models in its calculations and then applies a cascading model selection algorithm to choose the approach that is most accurate in the geographic area surrounding the individual property.
The results are startlingly accurate – ATTOM checks regularly – and startlingly broad. Valuations from the ATTOM AVM are available for more than 80 million U.S. homes across all 50 states and representing 99% of the U.S. population.
The ATTOM AVM Empowers Your Business:
- Real estate investment firms can develop scores based on lending-grade-quality data.
- Real estate portals can use highly accurate estimates to drive more traffic online.
- Insurers can calculate more accurate quotes based on location, profile, and risk data.
- Appraisal management companies can set broker price opinions, or BPOs.
- Marketers can build enviable prospect lists of properties.
With greater transparency, reach, and flexibility, the ATTOMOZED AVM is the evolution of automated valuation models.
Please contact us if you have questions about the underlying data referenced in this article, or would like to have access to that data in the form of custom reports, API, Bulk File or DaaS.