Pricing Reports

What is a Valuation Report or “AVM”?  

A Valuation Report is also known as an AVM. AVM stands for Automated Valuation Model and is a process to establish a market value of a property through "scientific" measures, versus a human's inclination. To determine a property's current value, an AVM uses computer decision logic based on sales trends, title records, neighbored analysis, market metrics, tax assessment databases and more. These reports assume a subject property is in average condition for the neighborhood with no substantial improvements or deficiencies when compared to any other typical home in the neighborhood. Once the searching and sorting for data is complete, the analysis is conducted and the AVM affixes a value estimate to the property.

It is important to note that an AVM is just once piece of the puzzle when pricing your home. You need to take into consideration the condition of your home, including any major or minor upgrades and renovations.

How can I purchase a Valuation or Property Report?  

You can purchase a Valuation Report or Property Report by clicking the Tools tab at the top of any page, then clicking Learn More under the heading "How Should I Price My Home in this Market?". If you are logged in to your Selling Center follow the links to Pricing Reports.

Or, simply go to www.forsalebyowner.com/appraisal.

Is a Valuation Report the same as an appraisal?  

No. A Valuation Report is not intended to be used as a replacement for an actual appraisal. It is a tool to help price your home. Valuation Reports are entirely objective in that they gather data, sort through it for comparability and then crunch those numbers to generate a value estimate. The key difference is that there is no human intervention. An appraisal requires that trained professional in that area gathers and sorts through data, makes a visual inspection of the property (which a valuation report doesn't), makes adjustments for differences between the comparable properties (comps) and the subject property and considers all of this information in their final evaluation for price.

I put in thousands of dollars worth of upgrades/renovations, shouldn't that make my home's value go up by at least the same amount?  

Just how much any particular individual improvement might add to your home's market value, can often vary widely from market to market, dictated by the wants and needs of each neighborhood. Check out Lowe’s Cost vs. Value Report at www.lowesmoving.com/images/pdf/115.pdf.

What is a Property Report?  

This report will provide meaningful property information on the subject property as well as the nearby sales. Median and average sales prices for the area are provided to help in gauging the sales price behavior in the marketplace. The 15 nearby sales will also provide sales information indicating property transfers that have been recorded at the county courthouse.

What is “Market Value” or “Fair Market Value”?  

Market Value is the price a home will command from a rational purchaser under normal conditions; the value of a home in today’s market. It is basic supply and demand economics. As home inventory on the market (supply) increases, home prices will fall if the demand is constant or declining.

It is also important to note what Market Value is not. It is not the amount you paid for your home, how much you owe on your home, the great price your neighbor received for their home, or the assessed value, or even the appraised value. It can change over night when the interest rates change or when five more homes in your area come on the market at higher or lower prices.

What if I don't want to use this price? Can I make up my own price?  

We recommend getting either a Valuation Report (AVM ) or CMA to use as a tool to help you price your home. There are many factors that go into determining the value of your property, including condition of your house, property values and the local housing market and trends. The price of your home should be based on both valuation and an objective assessment of current market conditions.

A few things to think about:

  • Are there a lot of houses on the market in the area?
  • Are houses selling slowly or quickly?
  • Is the economy doing well?
  • Are interest rates low or going up?
You need to research and find out what other houses have sold for in your area and what your competition has their houses listed for in your area. Armed with this knowledge you can then come up with a realistic price for your house.

What is a “Comparable Property” or a “Comp”?  

A comparable property or "comp" is a term used for a property that meets the following requirements:

  • Similar in type and size to the subject property
  • Sold in the past year
  • Within a prescribed radius from the subject

 

How can I make my report reflect my upgrades/renovations?  

These reports assume a subject property is in average condition for the neighborhood with no substantial improvements or deficiencies when compared to any other typical home in the neighborhood. Therefore, the Valuation report is not going to take into consideration those upgrades or renovations. The Valuation Report is one piece of the puzzle when pricing your home. The Valuation Report will provide a high and low range for your property. It is left to the buyers and sellers to make value adjustments based on how much the upgrades and renovations adds to them in terms of overall value.

I bought a package with a free Pricing Report - how do I get it?  

Login to your Selling Center and click View Pricing Report(s). From there you will be prompted to confirm your address to receive your free Pricing Report.

There is no Valuation Report for my property, how do I price my property?  

There are many factors that go into determining the value of your property, including condition of your house, property values and the local housing market and trends. The price of your home should be based on both valuation and an objective assessment of current market conditions. For example, are there a lot of houses on the market in the area? Are houses selling slowly or quickly? Is the economy well? Are interest rates low or going up?

My Valuation or Property Report is wrong about my property? Why?  

The Valuation Reports are based on public record information accessed from the county tax assessor and the county recorder. If you added bedrooms or bathrooms and have not had your property assessed since that time then data on your Valuation Report will not match the actual characteristics of your property.

What is a Valuation Report used for?  

A Valuation Report is used for several things:

  • Selling your house. A Value estimate is one piece of the puzzle to use in pricing your home for sale.
  • Calculating home equity. A Value estimate can help you see roughly what the appreciation of your property has added to your bottom line.
  • Timing a home-equity loan. To find out if you have enough equity to make it worthwhile asking for a loan.
  • Buying a house. Negotiating power, knowing how much a property is worth before you put in a bid. A Value estimate also give you an idea of local property values by letting you see what other homes in the area have sold for.

 

Why does the comp have a different number of bedrooms/bathrooms/square footage?  

The short answer is, not all homes are created equal. When looking for comps, the Valuation Report, the real estate agent, the appraiser all have to use the current sales data that is available to them. If an exact floor plan to the subject property has recently sold, that is generally considered a good comp. If that same property (exactly the same) sold three years ago, it’s considered too old to be a good comp. Appraisers, CMA's and Valuations go through a logical process of making adjustments for difference is between properties. If a four bedroom, two bath home, with 2000 square feet is being compared to a five bedroom three bath home, the various valuation approaches will make an adjustment in value in an effort to make that sale "comparable" to the subject property. In that manner, they can judge value based on the similarities and differences of each property.

What type of data is used to compile a Valuation Report?  

A Valuation Report draws upon available sales data in a local market, and uses it as a comparison to the property being valued. That is, how do the characteristics, sale price, sale date and other attributes of the property being valued compare to the properties that have sold recently, and over time? Measuring value changes over time allows the Valuation Report to assess the trend of activity that has occurred. Analyzing current sales against the property being valued allows the Valuation Report to account for market activity. The Valuation Report then utilizes these attributes to render a current value estimate.

Why don't you have a Valuation Report for my property?  

All of the property information reports that are available are based on public record information accessed from the county tax assessor and the county recorder. Although our report coverage is very high, there are areas that do not release the data in a timely manner or that county’s information is not being collected. We are periodically adding additional areas so the coverage does change from time to time.

Can I have the data on my Valuation or Property Report corrected? How?  

All of the property information reports that are available are based on public record information accessed from the county tax assessor and the county recorder. In order to have the data on your Valuation or Property Report corrected you would need to go to your county assessor office to make an appeal.

How often are property reports updated? Should I buy one every month?  

Theoretically, a Valuation Report could be updated as frequently as weekly (since it is fed by new comparables introduced to the system at regular intervals) if a person wanted to track the moderate changes in value. However, real estate is more of a long-term investment and we feel that reviews every 3-4 months a likely adequate.

How is the value computed on a Valuation Report?  

The value estimate uses scientific methods that employ statistics and mathematics and apply large amounts of data to the Valuation Report for analysis. Properties are compared to one another, and to the subject property for similarities and differences. Based on the data comparison, the model utilizes some properties and discards others in its assessment. For example, if the subject property is 2,500 square feet and one of the sales has 6,000 square feet, that sale may be discarded because of its dissimilarities.

How up to date is the data in your reports?  

The data used in our reports is based on public record information accessed from the county tax assessor and the county recorder and are updated as soon as the public records are updated. Public records are continually updated as new information is available. Some counties may take longer than others to report the data.