Sara Goodwin; real estate appraiser... speaks


AVMs; Automated Valuation Modules, what you should know

AVM stands for Automated Valuation Module.  The most popular AVM open to the public today is Zillow.  Two other AVMs are Trulia and Cyberhomes

I marvel at these AVMs, I really do.  They have these amazing algorithms that are constantly being improved upon.  But I start grimacing is when the general public and even the real estate community start taking these AVMs for more than a grain of salt.  In addition to some information that these AVMs tend to omit (see ‘basements, lot size, garage count, appeal and updates'), there is an emotional factor that I don't believe a computer generated model will be able to grasp.

Please take note, these web sites were not created merely for your entertainment, they were created to make money.  If you go to the front page of these sites, you will see by all the banner ads, that they are doing just that.  And as a free service to Realtors, they can add their listings into the database.  What a brilliant strategy they have thought up.... They are literally getting Realtors to enter information into their ever growing databases.  It's a win/win situation; Free ads for the Realtors and free information compilation for the AVM.

I'm going to concentrate the three aforementioned AVMs today and use an ‘example house' that I once knew quite well.  I have not stepped foot in said house for over 6 years now, and so I have as much knowledge about the condition of this house as any of the AVMs do....

I chose this house because:

  • I am familiar with the basics of the house and the area
  • I have no ties emotionally or financially to the house
  • It is a very average house for the area

Here is the information on this house according to the information these AVMs nabbed from tax records:

  • 2 Bedroom / 1 Bath
  • 1,015 SF main floor
  • 432 SF Finished Attic (included as GLA)
  • (540 SF finished basement not included in valuations)
  • 5,638 square foot lot (lot size is not counted in the valuations)


Here is some additional or corrected information:

  • 3 Bedroom / 1 Bath (the third bedroom is the entirety of the ‘finished attic')
  • The 432 square feet in the attic is more like 200 square feet due to low ceilings and sloping walls. 
  • There is a 500+ square foot partially finished basement that all three AVMs have chosen to ignore (because the same tax records they are gleaning their information from plainly shows the basement information).
  • The driveway and garage is shared with the neighbor to the north
  • The front yard is within eye and earshot of an arterial street
  • The next door neighbor is an apartment complex
  • Updates have been done throughout the house including kitchen and bath updates

 Gross Living Area:

AVMs glean their information off of tax records... sort of... I have yet to find one that includes basement space unless that basement space is included as ‘finished' and added into the upstairs GLA or Gross Living Area. 

For example, the house I currently live in shows that 200 of the 1,000 square feet of basement space is finished and so the assessor's office has added that 200 square feet to the upper GLA, completely skewing my house's square footage and eliminating any solid results on value from the get-go. 


Basements have completely different values in different regions throughout the country.   In the northwest, we generally value our basements more than much of the rest of the country.  For the most part, basements exceed the title of root cellar and most have finished concrete floors.  We cannot make assumptions about these spaces.  Headroom, floor and wall finish, etc are all very important in distinguishing how houses compare to one another.  In fact, the smaller the house, the more worth a basement has (especially if it's finished).

Bedroom count:

All three of these AVMs put a lot of weight on bedroom count.  In the Portland metropolitan area, however, it does not carry as much weight as above ground GLA.   In fact, the example house has three bedrooms, but tax records only show it as two.

Lot Size:

The average lot size in this house's area is 5,000 square feet and the subject's lot would be considered rather average.  However, none of the AVMs make any accommodations for lot size.  This can be incredibly essential when lot sizes vary from 5,000 square feet to 20 acres.  Even within the city limits, an 8,000 square foot lot can be quite rare and more desirable than a 5,000 square foot lot.  And if that 8,000 square foot lot is sub-dividable... well that's a whole other potential value to a buyer....

Building Type:

I have seen duplexes and bare land sales used to determine value for similar houses to this one.  As these databases are built up with Realtor information rather than tax information, this occurs less and less.


The example house is located in a nice area, but just south of a very nice area.  Although within a mile of one another, the markets are completely different.  AVMs do not take this information into account.

Garage Count:

None of these three AVMs take garage space into account, but a buyer or appraiser certainly would. 

Amenities and Appeal:

The computer cannot tell what style and appeal a house might have in comparison to another.  Many home owners believe their house is their castle and are going to believe that they're house is worth the high end of the range (or above). 

AVM Results for the example houes:

  • Zillow values this house at:  $334,000 (Zillow is basing this figure on one, yes just one recently sold home).  The zestimate can be manipulated (see image below) by inputting your own information about the house.  This can be used for good or evil, depending on how honest the in-putter wants to be...
  • Trulia values this house between: $329,600 - $340,567 (Trulia is smart, they do not claim a value or range, only what ‘similar' homes in the area have sold for and are currently listed at).
  • Cyberhomes values this house at: $311,383 (with a range noted at $280,245 to $385,090) - It is important to note that this information was last updated June 27, 2008.



Fortunately, all three AVMs give disclaimers to their services.  Unfortunately, all are hidden in the fine print and pretty generic. 

Zillow:  A full page of quantifications has been created on the web site.  The most important line, "A Zestimate home valuation is Zillow's estimated market value. It is not an appraisal. Use it as a starting point to determine a home's value."


Cyberhomes:  This is hard to find, but clear and concise: "Any home Valuation provided via this Site is NOT an appraisal report of the market value of the subject property prepared by a licensed professional appraiser. The Valuation has been generated by use of proprietary computer software which assembles publicly available property records and certain proprietary data to arrive at an approximate estimate of home valuation. The CyberhomesTM Valuation has not been prepared, evaluated or reviewed by a licensed professional appraiser. User is advised to engage the services of a licensed professional appraiser in order to receive an accurate and comprehensive evaluation of the market value of a home. Please contact your lender or REALTOR® to engage the services of a licensed professional appraiser. "

 What would I as an appraiser value this house at?  I wouldn't know until I sat down and did the research.  Sure, this will take longer than the .002 seconds for these AVMs to compile, but what I will offer my client is accuracy, knowledge and the all-important human touch. 

 This is not my first blog entry on AVMs.  You can find one here and another here and a third here

Updated 5/26/2011

I know it's much later... and a much different market... but I found this and thought I should add it for reference: 




... Granted... this is an REO, but the big picture is that this house is located on an arterial street, in average- / fair condition and 1,008 square feet of the aforemented square footage is in an unfinished basement.

Comment balloon 15 commentsSara Goodwin • August 27 2008 02:57PM


Sarah, what an excellent comparison of systems!  The real estate agent and consumers need to understand that there are many inaccuracies and inconsistencies in the public data sources that are utilized.

Posted by Michelle DeRepentigny, Broker Athens, GA (Success Realty) almost 12 years ago

Hi Sara,  This is by far the most complete review of AVM's I have seen.  Although Zillow has made tremendous strides in collecting relevant info it is still only a starting point !  Thanks again.

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) almost 12 years ago

Hi Michelle - Thanks so much for the kudos!  I think that understand some of the set backs these AVMs have can really help people to understand.  If a house is in the middle of acres of acres of new and like houses (with accurant tax information submitted), these AVMs can prove to be handy, but that is so rare around here.

Hello Bill - I'm glad you liked it.  I agree, Zillow has been pretty on top of improving itself (and the company looks like it would be a hoot to work for).

Posted by Sara Goodwin, Portland, Oregon Appraiser (Ashcroft & Associates) almost 12 years ago

Sara - These AVM's are a guide, at best.  They may give a remote idea, but you laid everything out very well here.  I wish we had more input from appraisers here, thank you for your insight.  Heck, I'm flagging this one.  And that human touch thing, boy is that missing from Real Estate these days...

Posted by Jason Sardi, Your Agent for Life (Auto & Home & Life Insurance throughout North Carolina) almost 12 years ago


Excellent post.  You should re-post it on Zillow Discussions and Truila Voices.  Cyberhomes does not have a forum or discussion section that I know of.  If you don't want to or can't, let me know and I will with you permission of course.

Posted by David Hintz, AZAppraiser (Accurate Appraisals & Consulting of AZ) almost 12 years ago

Thanks, Jason!  I'm sure you've heard 'but Zillow says... ' from your clients as well.

Hi David - I posted this to Zillow Discussions, but did not know that Trulia had a forum.  I will go find it.

Posted by Sara Goodwin, Portland, Oregon Appraiser (Ashcroft & Associates) almost 12 years ago


That's a great comparison of these top ranked "on-line appraisal services".  These services remind me of the old computer jargon-garbage in, garbage out.  I try to explain to people all the time of the shortcomings of this type of service, such as the inaccuracies in living area, bedroom/bath count, updating, etc., however maybe we can use these discussions as a springboard for starting a dialog and hopefully develop business from it.

Posted by Tom Horn, Appraising The American Dream (Thomas Horn, Real Estate Appraiser) almost 12 years ago

Thank you, Tom - I hope that people start to understand that it does not hurt to look your home information up on these sites, just don't necessarily expect the property to appraise for the numbers showing on these sites. The fact that these sites show the reader what it used for comparable properties is great.  If the reader choses, they can research each individual property and see how relevant it is.  There are a lot of counties that post their information for the public to see. 

Posted by Sara Goodwin, Portland, Oregon Appraiser (Ashcroft & Associates) almost 12 years ago

Brett Shaw from Cyberhomes:

@ David: has just launched a blog on our site that allows users to voice their opinions and give feedback to articles and submissions.  You can check it out at  

Sara, excellent analysis!  These AVMs are a starting point in determining the value of your home.  Ultimately, a local REALTOR will provide the best price.  I was just wondering if you went into the "change home value" section of Cyberhomes?  Here you can adjust for lot size, basement remodel (as well as many other upgrades/additions), view, privacy (this is the shared driveway and apartment complex adjustment), interior and exterior conditions, etc.  What I find is that most people only scrape the surface when it comes to the AVM.  

As far as the "last updated" question, we update information in real time as it is given to us.  The way I see it, this is an opportunity for an agent to show their expertise.  We all know that home prices have dropped since June, but how far?  This is where the agent shines.  They can use this value and date to show that these are not dead-on appraisals of your home.  They are never intended to be, as you saw in our disclaimer.  

Posted by Brett Shaw (Coldwell Banker Kaiser) over 11 years ago

Hi Brett -

I'm so glad that you dropped by. 

I had been to the 'change home values' on the Cyberhomes web site, but not when researching for this blog.  I should have revisited it just to be fully educated... and so I just went back to work the information. 

The new intro page is sleek.  I'm not sure that being able to manipulate that information is any better.  It gives the reader a false sense of reassured value, but then the 'comparable properties' are not properly updated. 

Also, if I want to include the basement SF (which is done with about 200 sf of my house, but not usually, however sometimes included into neighboring properties), I have to add that into the GLA, which really skews the research all together. By entering the basement square footage in the overall GLA, I increased the value by nearly $50,000 in just a couple of clicks.  If I add in updates, it continues to increase the value of my property, but it is presumed that the other properties that are used to determine my properties value are all 'average' without updates.

Posted by Sara Goodwin, Portland, Oregon Appraiser (Ashcroft & Associates) over 11 years ago

I am a Real eatate appraiser and just has been chalenged by an AVM.

The AVM model estimated the market value of the subject  property for $85,000 less than the appraised value.

The subject property was a tudor style dwelling, in updated condition. The AVM does not take into account the condition of a property. I did  research on the comparable sales selected by the AVM. I would have discounted then all They all closed past 180 days and the lenders guidelines were to utilize sale that closed in the past 6 months.   

After 10 years as an appraiser I think Im done.

Posted by theresa over 10 years ago

Hi Theresa -

I hear ya.  When lenders use AVMs to back a credible appraisal report, it is no less than backwards thinking. 

I would imagine that the AVM not only 'overlooked' condition, but possible basement space, appeal, etc.  Incorrect square footage on tax records are a big factor in my area as well.

Stick in there!

Posted by Sara Goodwin, Portland, Oregon Appraiser (Ashcroft & Associates) over 10 years ago

I just had my home appraised 2xs in the past 3 months for a refi. CyberHomes undervalued my property by $110k (Without allmost $50k in improvements). I checked other homes in the community on CyberHomes and ALL were almost 30% below recent appraisals and actual sales and listings in the area. 

Posted by Mozart about 10 years ago

I just had my home appraised 2xs in the past 3 months for a refi. CyberHomes undervalued my property by $110k (Without allmost $50k in improvements). I checked other homes in the community on CyberHomes and ALL were almost 30% below recent appraisals and actual sales and listings in the area. 

Posted by Mozart about 10 years ago

Mozart -

This is a completely tardy response and I hope your home value has remained above the 30% + above the AVM as it was in 2010 ~

Posted by Sara Goodwin, Portland, Oregon Appraiser (Ashcroft & Associates) about 9 years ago