AVMs… Garbage In, Garbage Out
It’s no secret that AVMs have been a thorn in the side of real estate appraisers since they first came out. Despite all their bells and whistles, these automated valuation models still rely on inaccurate public records and often come up with wildly inaccurate home values. Unfortunately, some consumers don’t realize this until it’s too late – when reality comes crashing down from a local real estate professional after they’ve already gotten their hopes up about their home value thanks to an AVM.
Yesterday, a Virginia assessor emailed us with an interesting conundrum. While gathering information on a property, he discovered it actually contained two houses with two separate addresses – one 840 square feet and 2 bedrooms, 1 bath; and another 642 square feet but uninhabitable due to a caved-in roof. Despite this discrepancy in size and condition between the two homes, automated websites such as Zillow, Redfin & Trulia were pulling from tax records to show 1482 square feet of living space with 4 bedrooms – not taking into account the cost of removing the old house or its condition!
As real estate appraisers, we know how important accurate property data is for our clients. That’s why it’s so concerning when automated websites like Zillow, Redfin and Trulia pull from tax records that don’t accurately reflect the true size of a property.
The problem is that most AVMs use public records which are notoriously unreliable for determining accurate property values. They usually just look at square footage details from tax rolls without ever seeing the property in person or taking into account any other features like age or condition of the house – factors which can drastically affect its value! It should go without saying then that anyone who understands how valuing homes works knows just how close to useless these products really are; garbage data in means garbage results out every time!
So why then is Fannie Mae making a mistake by no longer requiring a home appraisal as the default option for property valuation? They claim they want to make “the home valuation process more efficient and accurate,” but this couldn’t be further from reality.
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