7 Things an Automated or Non-appraiser Valuation “Won't tell you”.

Automated Valuation Models (AVMs) used by lenders and brokers and homeowners using "free online home values" to help them determine the value of a property need to know what the results aren't telling them.

1. Whether the house or property really exist? One cannot tell whether the property does exist or not when accessing from a remote computer. It would be more helpful to drive down for yourself to validate information and locate the exact address and to check if it has four walls, a roof, four bedrooms and rest of the features.

2. How long ago the property was assessed? Using an AVM or free online service for appraisal might increase your risk of obtaining lower values than what’s in reality. Many of these AVMs and online services rely on public assessment records and in most states, assessments maybe required every three years - that would mean the values are three years way back.

3. Whether unique features of a property might raise or reduce it from its market value? Remote assessments might turn out estimated values favorable to us but you might want to consider other aspects in its entirety like: presence of sewage treatment station nearby, railroad tracks nearby that blow horns at night, nearby schools, access to commercial establishments and so the list goes on.

4. Whether current market values are declining? Data’s from automated assessments or valuations are taken from recent or nearby sales activity. If these purchases where completed at the height of a local housing marketing activity, assessments normally reflects up trend results even if an appraiser perceives a downturn in the neighborhood. As a lender or an appraiser, don’t get trapped on property values overhauled by computer.

5. Whether there is a conflict of interest? Free online and automated home values are usually farmed out from different real estate agents. Often, they use these services to get your property listed and they are at most confident to overstate values to get a higher price for your property. They might tell you that your property is worth as this “high end values” and make you believe they can sell it and so more likely you are to sign a listing agreement. In most business undertaking, it is at most best to under promise and over deliver but the opposite happens with free online home value services.

6. What makes the comparables” comparable”? With online free home values, the computer might equate your subject property with similar features or values with those sold months or years ago. Those “comparable values” do not reflect other aspects like the surrounding neighborhoods, industries and easy commercial access or if it’s prone to disasters or adversities. A computer is less reliable and is not capable of adjusting values needed to make it “comparable” to a property sales price.

7. How qualified and experienced are the individuals who charted and drafted online values? While online and automated values are less reliable, it is still best to tap services of a professional or licensed appraiser. We can be confident that they are highly qualified and we would know their working values and professionalism and of course their sound judgment compared to relying on online and automated values.