Lenders and brokers using Automated Valuation Models (AVMs) and homeowners using "free online home values" to determine the value of a property need to know some of the major limitations of those models AVMs have three principal limitations:
First, they are dependent upon the accuracy, comprehensiveness, and timeliness of the data they use. Data issues can include incomplete public records, non arms-length transaction records, insufficient sales of properties with comparable features within a specified geographic area, and a lag between the time when the market data are current and the AVM uses the data to generate an estimate of value.
Second, AVMs cannot be used to determine the physical condition and relative marketability of a property.
Third, AVMs can never fully incorporate the breadth of knowledge and judgment of a skilled appraiser
For more information visit our website:
http://www.bennett4appraisals.com/AboutAVM
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