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Computer Value Estimates Vs Professional Home Appraisal
Computer home value estimate programs known as AVMs (Automated Valuation Models) can be a useful tool to quickly check the value of your home. But are they accurate? Technology has become more advanced and a computer can access the selling price of homes nearby and the square footage with an algorithm that determines the value of your home based on price per square foot in the area. But can a computer do a better job of estimating the value of your home than a real estate appraiser?
That’s because computers do not have the ability to take into account the specific nuances of a home including quality, condition, updating, and living area - especially if the home has additions.
There is no human interaction with the computer valuation and it cannot generate an educated estimate without seeing the home.
Additionally, while computers can look at patterns of data, they are relatively poor judges of just which data is most important in the sale of real estate. In order to truly see a pattern, you need to have years of home appraisal experience within the local area and have some knowledge of predictable trends that occur throughout time.
Computers take into account one zip code and average out the price per square foot for the entire zip code. But they have no way of knowing the condition of the home. Your home might be a new build in a brand new neighborhood with all the finest finishes, while another home 10 miles away in the same zip code is 12 years old and is the worst looking home in the neighborhood. A computer will estimate they are the same price per square foot, while a professional home appraiser likely will not.
In addition to these nuances, if you were to have an AVM done on your home by several different companies, the results could vary by 20% or more. If you have more than one home appraisal completed by qualified appraisers, it is likely that the results would be very similar.
I recommend betting on the home appraiser rather than a computer simulation.
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