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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] The problem and the solution... Posted by Rick, the Probate Guy on May 24, 2009 at 7:47 AM In Reply to: Home Value Software?? Dataquick?? posted by jay on May 23, 2009 at 11:48 PM There's been plenty of discussions about Automatic Valuation Model (AVM) programs both on this board and the other real estate boards. When these programs started becoming more popular and available to the general public on free sites, many people thought that much of their valuation research was complete. After all, real estate always goes up, right? I can recall people telling me and posting here and there, that their property had gone up by X every month per Zillow "zestimates." Now, some of these people are probably so depressed about their upside-down property values that they've been prescribed Xanex ("Zanex?"). AVM software, including the ones you mention, have their place. However, they're still based on an algorithmic formula that extrapolates sales data and interprets that data based on whatever biases are built into the program. These programs may work well in static markets, but in dynamic, declining markets such as our, I don't think that they fully address the trend. Here are a few more valuabtion factor issues that AVM's don't have a handle on: 1) Neighborhood preferences 2) School district preferences 3) Functional and other obsolescences 4) Proximity to adverse influences 5) Deferred maintenance I suppose that this list can go on ad infinitum, but the point is, AVM software will only get you part of the way. We have an internal system that we use to pre-qualify or at least screen and scrub prospects for value before we go any further, using: Title company comps, Dataquick, Trulia, MLS, in that order, as well as calls to industry people that we know if the property is in an area that we don't work monthly (we work all 58 counties of CA). Of course, we do get appraisals however I don't take a lot of stock in appraiser's values either. After all, most appraisers go for the $400 check instead of the big checks, Tony Alvarez and Steve Love being exceptions. So, AVM's, Dataquick included, have their place but I can't rely on the results. I think they work best to see what should be eliminated as a deal rather than what should be a deal, that is, by using AVM's to ID low value PIQ's to scrub from your list. The real value can't really be determined until someone with experience drives the property. And B-T-W, I rarely see the properties that I buy until after I own them so there ARE ways to do this without personally leaving your office, if your style is to work smarter, not harder, like me. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : There's been plenty of discussions about Automatic Valuation Model (AVM) programs both on this board and the other real estate boards. : When these programs started becoming more popular and available to the general public on free sites, many people thought that much of their valuation research was complete. After all, real estate always goes up, right? : I can recall people telling me and posting here and there, that their property had gone up by X every month per Zillow "zestimates." Now, some of these people are probably so depressed about their upside-down property values that they've been prescribed Xanex ("Zanex?"). : AVM software, including the ones you mention, have their place. However, they're still based on an algorithmic formula that extrapolates sales data and interprets that data based on whatever biases are built into the program. : These programs may work well in static markets, but in dynamic, declining markets such as our, I don't think that they fully address the trend. : Here are a few more valuabtion factor issues that AVM's don't have a handle on: : 1) Neighborhood preferences : 2) School district preferences : 3) Functional and other obsolescences : 4) Proximity to adverse influences : 5) Deferred maintenance : I suppose that this list can go on ad infinitum, but the point is, AVM software will only get you part of the way. : We have an internal system that we use to pre-qualify or at least screen and scrub prospects for value before we go any further, using: : Title company comps, Dataquick, Trulia, MLS, in that order, as well as calls to industry people that we know if the property is in an area that we don't work monthly (we work all 58 counties of CA). Of course, we do get appraisals however I don't take a lot of stock in appraiser's values either. After all, most appraisers go for the $400 check instead of the big checks, Tony Alvarez and Steve Love being exceptions. : So, AVM's, Dataquick included, have their place but I can't rely on the results. I think they work best to see what should be eliminated as a deal rather than what should be a deal, that is, by using AVM's to ID low value PIQ's to scrub from your list. : The real value can't really be determined until someone with experience drives the property. And B-T-W, I rarely see the properties that I buy until after I own them so there ARE ways to do this without personally leaving your office, if your style is to work smarter, not harder, like me. : [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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