I look inside a bank's AVM . . .

I put together a look into that OTHER Zillow, a typical AVM used by banks for their internal purposes. This is one reason bank's dont use Zillow for values - they dont need to, they usually have their own.

A house in So Cal recently sold, this week for $610,000. It was a Bank REO I believe. In the local MLS, I pulled up this datasheet, which includes a CoreLogic AVM, located on page 2. It was for $561K. Zillows estimate, BTW is $563K, which is located here.

Marketing time was a typical 52 days.

Whats interesting is this datasheet is available to any and all local Realtors, and it has a plethora of data. If a bank or lender uses CoreLogic as their AVM, this is the value that would have come up for this property.

CoreLogic is one of the few companies that produce an AVM service for banks, and they are one of the largest. CoreLogic shares their RealAVM with this one particular MLS system.
  • September 26 2011 - Moorpark
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Answers (7)

Profile picture for Blue Nile
No, you should not get the same numbers with different methods, even if the basic public record data is the same.

And the longer it has been since a previous sale, the more the numbers should disagree.

Check out the values given by:

Homesand.net

Eppraisal

realquest.com express

cyberhomes.com

trulia

chase

homegain

homes.com

Even RealQuest Express, also owned by First American Core Logic is coming up with a different number:
$567k
4313 Persimmon St

50 similar sales in the area, sold within the past 12 months, within a little over a mile radius.

And homesand.net with "best 3 comps" came up with $590.5k
  • September 26 2011
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Profile picture for Reallyfedup
AVM's use collected data.  Doesn't matter whether it's Zillow or CoreLogic or any of the other AVM's. If they gather their information from the same public sources, they are going to get the same basic results. 

It's still just collected data and not interpreted and analyzed data. It's taking numbers from sales and coming up with a value rather than knowing the reason for the sale numbers.  They don't factor in the condition, amenities etc.  

What I would like to know, is how does the sale price of $610,000 compare to other solds in the area in a similar condition and location.  Unless this was a cash deal, it would have to appraise out for the loan to be approved.
  • September 26 2011
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Profile picture for Blue Nile
It appears that the foreclosure auction sale of $549k on 5/27/11 is driving both of these AVM estimates...
but the sale of 5/27/11 doesn't show up on the Zillow home details page.

Still, an estimate of only 3% higher than the distressed sale doesn't seem to properly take into account the expected difference between distressed and non-distressed sales.

Of course, with it being bank bought, maybe they figured still will be a distressed sale?

If Zillow uses the USE code for modeling, you would think it would appear on the home details page; but as far as I can tell, it doesn't.
  • September 26 2011
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More facts is that this property was a REO with only new paint since foreclosure. It also BACKS a connector street which would adversely affect the value. It also has a pool and spa, which may not be factored into an AVM. A pool and spa in this area would bring about $30K of value. The property also WAS a model when it first sold 10 years ago, noted only in the MLS.

In LA county, the 'use' code separates out homes WITH pools vs homes WITHOUT pools, and that use code is used in AVM's and Zillow. In Ventura County, there is no separate use code, so I dont know if the fact that the property has a pool/spa is factored into a AVMs value or not. Pool/spa are noted in the public records but only secondary.

Good example of a number of factors that are considered by real humany beings - buyers and appraisers, but not AVM's....... least not yet...



  • September 26 2011
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I believe that chase.com use the CoreLogic AVM, however, don't try to be a car sale man neither tried to be good but my website gets closer. 8)

http://homesand.net/Quick ... 021?Map=1
  • September 26 2011
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Profile picture for Blue Nile
Amazingly close machine generated estimates without site visits.

No wonder First America Core Logic has sued Zillow and others for their methods.

No wonder people keep blaming these other estimates on Zillow!

I was kind of surprised about all that mortgage history; and a bit confused about why the smaller number kept showing up... a second?  Not noted as such.

I was also a bit surprised about the standard deviation given.  11?  $11k  11%?

Zillow's standard deviation is running about 10%.

So, the estimate is about 9% lower than the "sold" price?

Zillow indicates foreclosure sales run about 10% to 30% less than non-distressed sales, especially with higher market saturation of Foreclosures.  So, why a foreclosure sale amount so much above the estimates?

Or, was it recently renovated after the previous purchase?
  • September 26 2011
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Profile picture for sunnyview
Thank for the insight Vince. I think that many people think that the AVM's are newer than they actually are. Banks/lenders have been using them for a long time to gauge preliminary value on homes. They are not appraisals, but they do provide some broad insight about value to see if you're in the ballpark when you go for a loan.

I do think that lenders should explain how those sites work and give owners/buyers an option to pay for an appraisal even if the AVM is not favorable. It is a risk to pay for an appraisal out of pocket, but I think that owners should be given that opportunity if they are willing to pay to see what a licensed appraiser's opinion is.
  • September 26 2011
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