What homeowners should know about AVMs, online estimates, and the value of a professional market analysis

If you have checked your home’s value online lately, you have probably seen an instant estimate generated by a real estate website. These estimates are known as Automated Valuation Models, or AVMs. They can be useful, fast, and convenient—but they are only one piece of the pricing puzzle.

What Is an AVM?

An AVM is a computer-generated estimate of a property’s value. Major real estate websites use algorithms that pull from available data to produce a value quickly. That data may include:

❖  Public and assessor records

❖  Past sales and nearby comparable sales

❖  Tax information

❖  Square footage

❖  Bedroom and bathroom counts

The Advantage: Speed and Convenience

The biggest benefit of an online valuation is speed. A computer can gather available information and produce an estimate almost immediately. For homeowners who are simply curious, an AVM can be a useful starting point and can provide a general sense of where a property may fall.

The Limitation: A Computer Has Not Walked Through Your Home

The challenge is that an algorithm does not actually visit your property. It cannot see the street, experience the neighborhood, walk through the rooms, or judge the condition and quality of improvements. It may recognize that a kitchen or bathroom was updated, but it may not understand the quality of the materials or workmanship.

That matters especially here in Franklin County and the surrounding area, where our housing stock varies tremendously. Two properties that look similar on paper can be very different in the real world. Acreage, outbuildings, utilities to those buildings, location, land characteristics, condition, and the overall quality of a home can all affect value in ways an automated model may not fully capture.

Current Market Conditions Matter, Too

Another important factor is the current market. Pricing a home is not just about historical data. Supply, buyer demand, competition, recent activity, and what is happening right now all matter when determining a realistic market value.

When you are considering a major financial decision—especially selling your home—you want the full picture. An online estimate is fine to review, but it is important to understand where that number comes from and what information may be missing.

A Professional Evaluation Gives You Context

A Comparative Market Analysis (CMA) and, when appropriate, an appraisal can provide a more complete evaluation because they consider the property itself along with relevant comparable sales and current market conditions. A professional can analyze the details that an algorithm cannot see and explain how those details affect your home’s position in today’s market.

Thinking About Your Home’s Value?

If you are thinking about selling—or you simply want a clearer understanding of what your home may be worth—do not rely on an online estimate alone. I would be happy to take a closer look at your property and prepare a professional Comparative Market Analysis based on your home and today’s market.

Corinne Fitzgerald
FITZGERALD Real Estate
Serving Franklin County and Beyond
Call or Text: 413-320-9509
[email protected].