Definition
Computer algorithm estimating property values using comparable sales data, property characteristics, and market trends.
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AVMs use algorithms analyzing sales comps, property features, and market data to estimate values. AVMs are fast and inexpensive but less accurate than appraisals. Lenders use AVMs for initial valuations. AVM accuracy varies significantly based on market and property uniqueness.
Pro Tip
AVMs provide quick estimates but aren't official appraisals; use for initial pricing, get professional appraisals for lending.
Example
AVM estimates property value at $450,000 based on recent comps, property features, and market trends