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Beware of Automated Valuation Model Prices

Posted By Wally Reule @ May 12th 2014 6:49pm In: Sedona Real Estate Market News

So, what is an Automated Valuation Model (AVM)? Essentially it's a  technology driven estimated probable selling price of a home that was derived using an analysis of public records and computer decision logic. If you've ever gone to Zillow or Trulia to find out what you're home is worth, that's where the estimate comes from. Unfortunately they are sometimes wildly inaccurate, but sellers want to believe the AVM when it's too high and buyers want to believe it when it's too low. The fact is that the only way to get a real estimate of a home's value is with a real appraisal or a professional Comparative Market Analysis, and even those may vary somewhat. Just to see the difference I checked on my own home, which I sold last November. I sold it for $360,000. Zillow reported that it had sold for $300,000, but Trulia got it right. However, Zillow estimated the current value of the home to be $394,000, while Trulia gave it a value of $630,000. I'm sure the Zillow number is closer, but you can see how confusing this can be. My advice: Work with real estate professionals like Jan and Wally when it comes to the serious business of buying or selling real estate in Sedona.

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