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Leveraging AVM Technology - read story

> The authors have incorrectly stated that AVM offers support for a time adjustment. This is false.

What the AVM offers is evidence of price trends. This is very different from a time adjustment in an appraisal of real estate. The correct way to do a time adjustment for appraisal purposes is to look up recent sales of houses in the subject neighborhood. Out of these recent sales, find the ones that also sold over the past two years. Lookup the MLS listings for both sales and see what contributions the latest seller has made to the property. If the first house sold for $200,000 a year ago and the current sale is for $211,000 with the seller paying $11,000 in points, there was a zero time adjustment. However, the AVM price trend would be say 5.5%. If the first house sold for $200,000 a year ago and the current sale is

$240,000 with the seller paying for $40,000 in upgrades and remodeling, there is a zero time adjustment. However, the AVM price trend would say 20%. If the first house sold for $200,000 a year ago from a bank as a repo without being listed and the next sale is for $212,000 with normal marketing and no work done to the house, there would be a zero time adjustment. However, the AVM price trend would say 6%. All of these items take research and analysis. They can not be done with public sales data. I disagree with the author's conclusion that, "The AVM valuation may be considered a ‘new’ valuation method, a separate unbiased opinion of just additional support for the appraised value."  It is just a mathematical model that predicts a sales price with a certain degree of certainty from a large group of sales. It should not be used to value an individual property or to support a time adjustment. - Marcos (Marc) E. Campos , MAI, SRA

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