Automated Valuation Models (AVMs)

AVM Basics

Automated Valuation Models (AVMs) are highly efficient and cost effective valuation tools often used to augment risk management or to streamline the mortgage loan process.

AVMs use market data to estimate the value of a piece of real estate. It is a technology-driven report that analyzes public records to provide a calculated estimate of a probable selling price of a residential property. An AVM typically includes:

  • An indicative market value for many residential properties nationwide.
  • The tax assessor’s indication of value, if available.
  • Information on a subject property and recent sales history.
  • Comparable sales analysis of like properties.

AVMs in Lending

Lenders use AVMs as a part of valuing properties for mortgages. In fact, some mortgage lenders rely on AVMs rather than regular appraisal inspection reports. Even if an AVM is not used to originate a mortgage, many lenders use AVMs to check up on their properties or to help them make decisions on handling properties. AVMs are increasingly used by mortgage lenders to determine what a property might be worth in order for them to lend against the valuation. The advantages of using AVMs over traditional valuation methods are that they save time, money and resources (e.g. there are no transport requirements), thus lowering the cost of valuing a property.

Available in all 50 states, Applied Valuation Services offers several customized AVM solutions to meet your individual needs.

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