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AVM and CMA Explained
How do you get an accurate estimate of the current value of your home, or a property you are interested in purchasing? There are a few ways, two of the most commonly used are the AVM and the CMA. What are these you may ask? You likely see an example of an AVM if you are looking at websites that give an automatic value of a property you have searched or when you are scrolling through homes for sale. If you have had a real estate professional research a property for you, then you may have received a CMA from them.
AVM = Automated Valuation Model
CMA = Comparable Market Analysis
First, let’s discuss the difference between the two.
AVM
AVM, an Automated Valuation Model is a software-based tool that’s used in residential and commercial real estate to determine property value. The service uses mathematical or statistical modeling with a combination of existing databases to determine the value of a particular property. AVM reports are driven by technology, including proprietary algorithms, and can be obtained in seconds by lenders and agents. AVMs use historical data and may not be up to date.
Examples of property data used by an AVM:
- Property size (acreage)
- Home size (square footage)
- The number of rooms (bedrooms, bathrooms, etc.)
- General location (state, city, zip code, and sometimes even neighborhood)
- Property price history
- Property tax valuation history
- Property historical sales information
CMA
CMA, a Comparable Market Analysis is an estimate of a home’s value used to help sellers set listing prices, and to help buyers make competitive offers. Agents and brokers complete CMAs utilizing the list of property data used in AVMs as a starting point, but then research additional information. Agents will look at some very crucial home specific data that can significantly change what an AVM will not take into consideration. These items include:
- Actual current condition of the home. We will take note of the home’s size (particularly the livable space), age, style, construction, condition, layout, finishes, landscaping, and notably upgrades and updates or significant deferred maintenance that can have a considerable impact on the estimated value.
- Neighborhood evaluation including the general quality of the neighborhood. Where are the more attractive blocks? How close are community amenities? How close are community nuisances? What are the HOA rules? How are the schools? Are there any issues with curb appeal?
- Research on the Expired, Sold and Active listings will reflect today’s market, not the market months ago. Agents will see what homes did not sell at a price point and how long before they sat on the MLS before they expired. Just sold properties are available and up to date for the most current comparables. The active for sale homes will be today’s competition to review, along with the days on market reflecting what the market will bear.
Having a CMA completed by an agent who has local knowledge of the area, the trends and possible city and neighborhood plans is priceless. We can actually drive the neighborhood and physically visit the home and can provide you with a thorough professional estimate. There is no substitute for the human touch and research compiled beyond a mathematical algorithm calculated by just the “averages” in an area.
As an experienced REALTOR®, I can help you with an estimated value for your home, or the property you are considering buying. I will diligently research and compile property-specific details applying the principles of substitution and adjustments with the most comparable properties to your desired property. An AVM may be “instant” with the click of a button on an online website, but a CMA will empower you to make the most informed decisions on pricing your property.
Take the guessing out of “what is my home worth?” and call me today. I am here to help.
Annette Dammeyer, REALTOR®
Coldwell Banker Realty
808.747.3686
SL 3535792
