How to Prevent AVMs From Misleading Your Real Estate Clients
By William Jones @ Real Estate Daily
April 4, 2018

Many sellers are relying on automated valuation models (AVMs) to figure out the listing price on their home. However, these models do not consider the exact location and features of the home, and can thus cause sellers to lose thousands of dollars on the sale of their home. Since the AVMs are thought to be accurate, real estate agents are constantly struggling to convince their sellers that agents are a better resource for market data. Real estate professionals are trained to create accurate market analyses that help sellers determine the best asking price for their home so that the homeowners can make the most money from the sale.

Key Takeaways

  • Before consulting a real estate professional, many sellers are using automated valuation models (AVMs) to determine the asking price for their home.
  • The majority of AVMs offered online do not take into account all of the features of a home and are thus inaccurate most of the time.
  • Instead of using AVMs, sellers should turn to the expertise of a knowledgeable real estate professional.
  • Real estate agents can build the trust and confidence of their clients if they are educated about the local housing statistics and can provide a detailed and accurate comparative market analysis.


Jamie McCurdy wanted to sell her house in Houston quickly so she could move back to her home state of Missouri to be closer to family. McCurdy wasn’t concerned with making a big profit on the sale—after all, it was December 2013, and the local market was still trudging through the recovery of the last housing downturn. She just wanted a short timeline to close. So she researched home values online and was satisfied to list her 2,280-square-foot ranch-style house according to what the internet said her home was worth. Zillow’s “Zestimate” and other automated valuation models valued her home at $189,000. But her real estate agent, Penny Brockway, RSPS, broker-owner of Brockway Realty in League City, Texas, flinched at the figure.

Brockway wanted to respect McCurdy’s wishes for a quick sale, but given that the three-bedroom, two-bath home sat on 10,000 square feet of land, she knew AVMs were undervaluing her client’s property. So Brockway further researched local market data using the Realtors Property Resource®, including comparable listings, home upgrades and special features, and neighborhood dynamics. She found that most homes in the area sat on 7,000 to 9,000 square feet of land and didn’t have comparable features, such as a tiered deck, spa, and detached two-car garage. “Her house had everything,” Brockway says. “Beautiful wood floors and plantation shutters. It was really at the high end in the neighborhood, and I knew we could get more money.”

To McCurdy’s surprise, Brockway suggested listing the home for $227,000—$38,000 more than McCurdy envisioned.

View the original article at Realtor Magazine