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

Lenders and brokers using Automated Valuation Models (AVMs) and homeowners using "free online home values" to determine the value of a property need to know what those results aren't telling them.

1. Whether the house is really there. A computer can't so much as drive by that house in Visalia your considering purchasing 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. 

2. Whether unique features of a property might add to or detract from market value. So a computer returns an estimated value of $150,000. Did it account for the sewage treatment station a mile from your home on Road 196 in Lindsay? The railroad tracks near highway 99 with trains that blow their whistles every night? The fact that you live in the Clovis school district? The desirability of your tree-lined Sycamore street in Tulare versus Apricot Avenue two streets over? Your LOCAL Tulare County Appraiser


3. How long ago was your property assessed? Did you know that in Tulare County all homes are being reassessed due to the declining market? Many AVMs and free online services rely on 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. Your LOCAL Tulare County Appraiser 

4. What makes the comparables comparable. A computer might compare your home in "Porter Creek" in Porterville to another home with similar square footage that sold three months ago a quarter of a mile away on Henderson Avenue. 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, 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 . Your LOCAL Tulare County Appraiser 

5. Whether a market is declining. Automated valuations use data from recent, nearby sales. In areas such as Hanford and Lemoore, new construction is plentiful. 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 such as Ed Savery, 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. Your LOCAL Tulare County Appraiser 

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. Your LOCAL Tulare County Appraiser 

7. What qualifications, designations, experience and education the preparer of the value has. When you work with Savery Appraisal Services Inc., you can be confident we're 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 an appraiser's education, experience and expertise.