What is AVM or Instant Valuation?

Feb 6 | 3 minutes read
Instant Valuation AVM

AVM stands for Automated Valuation Model, it is a computerized method of estimating the value of a property by analyzing data on similar properties and real estate market trends.


AVM is like a virtual real estate agent that works tirelessly to estimate the worth of a property. It uses a vast pool of data, analyzing factors such as location, market trends, and the characteristics of similar properties, to come up with a lightning-fast evaluation. It's like a superpower for real estate professionals, allowing them to quickly assess a property's value without setting foot inside. While AVMs are a useful tool, it's important to remember that they're not perfect and a professional appraisal may be necessary for a more accurate assessment of a property's worth.


The model uses various data sources, such as market trends, real estate data, and information on similar properties, to determine an estimation of the property's value. AVMs are commonly utilized by lenders, real estate agents, and appraisers as a preliminary assessment of a property's worth. However, it is important to note that AVMs are not a substitute for a professional appraisal, as their results may not be as accurate as a comprehensive evaluation conducted by a licensed appraiser.


Benefits of AVMs:

  • Quick as Lightning: AVMs provide lightning-fast property evaluations that can be done in mere seconds.
  • Always on the Go: AVMs can be used anywhere, anytime, making them a convenient tool for real estate professionals always on the move.
  • Budget-friendly: AVMs are typically much more cost-effective compared to traditional appraisals, making them an ideal option for those with a tight budget.
  • Unbiased Estimations: AVMs use standardized algorithms and data sources to provide consistent and impartial evaluations, leaving no room for personal opinions or biases.


AVM Instant Valuation Benefits



Drawbacks of AVMs:

  • Not Always Spot-On: AVMs can sometimes fall short of accuracy when compared to traditional appraisals. They rely on limited data and can't always account for unique features or conditions of a property.
  • Data Dependent: The quality of an AVM's evaluation depends largely on the quality of the data it's based on. If the data is outdated, inaccurate, or incomplete, the results can be misleading.
  • Human Touch is Missing: AVMs don't have the expertise and experience of a professional appraiser. An appraiser can identify and assess factors that may not be easily quantifiable or included in an AVM's algorithms.
  • One Size Doesn't Fit All: AVMs are generally only effective for single-family homes. Other types of properties, such as commercial properties or unique homes with unusual features, may not fit the AVM mold.


To Sum it up

AVMs are the superheroes of property value estimation, swooping in to save the day with lightning-fast evaluations. Utilizing cutting-edge algorithms and a wealth of data, AVMs provide quick and impartial assessments that can be done from anywhere, at any time. However, it's important to remember that while AVMs are a valuable resource, they are not a one-size-fits-all solution. Sometimes, only a professional appraisal can truly capture the essence and worth of a property. So, think of AVMs as the sidekick to a licensed appraiser's superhero, together they form a dynamic duo that will always have you covered when it comes to determining the value of a property.


You can see any property’s liquidity rate and estimated price in HOUSIFY’s Instant Valuation. Follow HOUSIFY’s Press Release for the latest product launches in the global real estate market. We have just launched Instant Valuation in London and will soon expand globally.