Source: South Florida Agent Magazine —
With the advancement of tech-based real estate services such as Zillow, Realtor.com, Redfin and others, customers can easily research and estimate the value of their homes without involving a Realtor. The big question is, how accurate are they?
Property valuations are the most integral part of a real estate agent’s business. You may find, or already use, easy and quick ways to determine property values. One such method is using an automated valuation model, or AVM. With so many options available, you will want to know how an AVM can benefit you and who the top providers are.
What exactly is a real estate AVM?
A real estate automated valuation model is a machine learning-based system that examines various data points to determine the worth of a particular property.
The information examined often includes details of the property, comparable sales data, the property’s age, market trends and more. There are many available real estate AVMs on the market. Zillow’s “Zestimate” is the most popular.
Zestimate is a key feature offered by Zillow and one of the first AVMs made available to the general public. When introduced, it caused some controversy, particularly among real estate agents. However, the Zestimate is so prevalent in clients’ minds that agents frequently intentionally bring it up during their listing presentations, detailing why it is either high or low or, perhaps, exactly right.
Zestimate pros and cons
The main benefit of Zestimate is that it gives users a basic idea of the value of their homes. On the other hand, Zillow’s estimates frequently rely on data submitted by users; as such, they can only be as reliable as the information given to them. Users’ errors or omissions can jeopardize the accuracy of the data.