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 Things an automated or non-appraiser valuation won't tell you

Lenders and brokers using Automated Valuation Models (AVMs) and homeowners using "free internet based online home values" to determine the value of a property need to know what those results aren't telling them.  Statistics can be a great tool, but these statistical based estimates of value are no better than rolling the dice when it comes to knowing what the individual property is REALLY worth

  1. Whether the house is really there. A computer can't so much as drive by a house to see if it's actually located where it's supposed to be, has four walls and a roof, and really is a four bedroom split level and not a one bedroom shack or out of place contemporary design in a traditional home neighborhood.

     

  2. Whether unique features of a property might add to or detract from market value.So a computer returns an estimated value of $350,000. Did it account for the sewage treatment station next door? The railroad tracks nearby with trains that blow their whistles every night? The school district? The desirability of its tree-lined street versus the next street over? The 180 degree mountain view? The walk-out basement that was so painstakingly finished with every custom detail?

     

  3. How long ago the property was assessed. Many AVMs and free online services rely on dated public assessment records. In many states, for example, assessments may only be required every three years — the value may be nearly three years old in that case. Some states mandate that an assessed value not increase beyond a certain percentage, even if sales activity indicates the property has appreciated far more. When you use an AVM or free online service, you risk a lower value than reality.  It might be generally accurate enough for tax assessment, but do you want to risk not knowing the true current value of the individually unique property?

     

  4. What makes the comparables comparable. A computer might compare your subject property to another property with similar square footage sold three months ago a quarter of a mile away. Even if that "comparable" property is in a different, less desirable school district, fronts a four-lane, 55 M.P.H. street, and is flood-prone. Or even if the property was sold under duress, such as in a divorce situation, a foreclosure, or not at arm's length, such as to a family member. A computer simply does not know all the adjustments that might need to be made to a "comparable" property's sales price.

     

  5. Wether a market is declining (or increasing). Automated valuations use data from recent, nearby sales. If those sales were completed at the peak of a local housing market, the computer will think the trend is going up. Even if a professional appraiser knows that the overall neighborhood is beginning to experience a downturn. As a lender, don't get stuck with a property that's been overvalued by a computer. And what about those individual neighborhoods that may be experiencing much stronger demand than others, and have a significant increasing value trend in a generally stagnant overall market? How is the AVM going to count for all those major items that the appraiser can see with his own eyes, and fully analyze in the appraisal report?

     

  6. Whether there is a conflict of interest. Free online home values are often farmed out to real estate agents in your area, who use the service to get your listing when you decide to sell. The best way to do that is to impress you with their confidence that they can get a higher price for your property. If they tell you your property is "worth" the high end of what they believe they can sell it for, the theory goes, you're more likely to sign a listing agreement. With most things, it's best to "under promise and over deliver" — but the opposite is true when you use a free online home value service.

     

  7. What qualifications, designations, experience and education the preparer of the value has. When you work with Asset Valuation Consultants, Inc. you can be confident our appraisers are highly qualified, ethical and prepared to complete your assignment professionally and with good judgment. Most of the time, you don't know the qualifications of whoever is behind those free online values, and they couldn't compare to an appraiser's if you did. And if you're relying on an automated valuation, you're cheating yourself out of the accuracy and reliability an appraiser's education, experience and expertise can provide.

SO, DON'T ROLL THE DICE . . .  

ORDER A PROFESSIONAL, HIGHLY QUALIFIED APPRAISAL SO THAT YOU WILL KNOW WITH CONFIDENCE "WHAT IT'S REALLY WORTH"!

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