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Automated Valuation Model


Automated Valuation Model (AVM) is an algorithm-based, mostly self-learning software used in the real estate industry to value houses and flats.


AVMs usually use mathematical models and property databases to perform automatic valuations of a specific property. Depending on the provider, a whole range of additional data can be used to produce the valuation. Current sales prices of comparable houses or flats in the immediate vicinity of the property to be valued are taken into account in the calculation of the property value, as are historical price developments in the local property market, the number of residential units, the state of modernisation of the property, and also surrounding traffic conditions. Depending on how detailed the automated valuation is to be, metadata such as crime statistics can also be included in the evaluation. The property values determined by AVMs are always to be understood only as neutral orientation aids and give those interested in selling an idea of the property value to be expected.

The AVMs of online property valuers can be regarded as non-binding orientation aids. Experienced estate agents will always issue concrete and reliable "manual" valuations to prospective sellers following the automatically generated valuations. These evaluations are carried out personally by the estate agent and, if necessary, other experts. For although AVMs can compare a multitude of property metadata in a matter of seconds to provide a guideline value, the intelligent algorithms are not able to carry out individual building fabric checks or assessments of the state of modernisation. The actual value of a property can hardly be determined by the database-supported software.

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