Brian J. Davis, RAA of Brian J. Davis & Associates of Bloomington, IL says, "If you're planning on selling your home yourself (FSBO - Fizzbo) you may save a lot of time and aggravation by having a professional pre-listing appraisal of your property completed by a certified residential appraiser."
"You can try doing some research on your own using the local multiple listing search tools, the online assessor databases, or maybe one of the many Internet "What's My House Worth?" sites . . .but data is NOT information.
The “Free” reports found on the Internet typically fall under two categories: Lead generation or Published Public Information.
Lead Generation: This type of website will offer to provide you with a Report in the form of a BPO (Broker Price Opinion) or BMA (Broker Market Analysis) regardless of the name. These reports are not USPAP (Uniform Standards of Professional Appraisal Practice) compliant and are done by real estate professionals not formally trained to value a home.
Additionally these reports are often fed to new Real Estate Professionals to the market who are hungry for business and are new to the market, not the seasoned Real Estate Agent as a best case. Most importantly, these professionals benefit from the value of the home by either commission or related business (spam, cross marketing your information, or dependent product sales such as Title searches), which means that the information you are receiving may be biased by an ulterior motive.
Published Public Information: These websites are a great resource for the curious consumer. It allows for general estimates of what property could be valued based on last known public/tax records.
You can reach these records by heading to the county office, but innovative websites such as Zillow.com effectively format information into an easy to read and interactive media. Zillow is careful to caution that they only have access to what data is available (occasionally dated/incorrect) and in complex or rural situations may not be complete or consistent with what the market trends reflect real time. The report presented here is not an appraisal nor can it be used in any format other than to test the waters as to where your value of home may be plus or minus a certain percentage (I’ll leave that up to Zillow to tell you). READ MORE . . .
AVM stands for Automated Valuation Model, a computer generated report. Using computer mathematical equations based on public records or other like data sources, the report is compiled without human hands. It takes into consideration past market trends, factual neighborhood analysis, tax assessments and other factors to determine the most logical value of a home. There is no involvement of an appraiser or person during this process and each company that offers it, uses their own set of calculations to achieve the final report.
With technology evolving it is arguable to state the validity of any of these reports. Each AVM provider states the obvious boasts: most coverage, accuracy, consistency, quality, etc. Everyone in the market claims that his or her product is cheaper, faster, and improved. The reality is that for reports ranging from $20 forward you are paying for the convenience of formatting public and available information. No one will dispute that the information is not always readily available, but to the informed consumer they should realize that Published Public Information is available for free.
AVMAA stands for Automated Valuation Model Assisted Appraisal. It starts with a computer generated appraisal report, which is an AVM, The difference between an AVMAA and an AVM is a local appraiser reviews and contributes to the AVMAA report based on local geographic knowledge and market experience. The appraiser does not do a physical inspection of the property but they will utilize any number of resources to make sure that the information and value presented in the final report is supported. This product is accepted currently in the banking world by both lenders and secondary market buyers where AVMs are typically not.
AVMAA with Picture: The product is based on the dynamic and accepted logic of an AVMAA. The product also includes a photograph taken of the property within 48 hours of the inspection and a field inspection report to ensure occupancy and a number of other basic crucial details.
Traditional Appraisals: A traditional appraisal is the MOST recognized supported opinion of value. It is an analysis, opinion, or conclusion relating to the nature, quality, value, or utility of specified interests in, or aspects of, identified real estate. In developing an appraisal the appraiser:
- gathers data,
- analyzes that data, and
- draws logical conclusions.
The appraiser may do an exterior only inspection of the property or a full interior and exterior inspection of the residence or multi-family property. The appraiser has been licensed by the state and is familiar with the natural trends of the local market.
There is no replacement for the industry knowledge that these professionals hold and when it is necessary to have a supported opinion of your value to make a financial decision there can be no substitute.
Thanks to uAppraisit.com for the original story: What’s the difference? “Free” Home Value Report
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