Computer generated and non-appraiser valuations

If you're considering using one of the many "free home valuation" tools to figure out your property's value or contemplating trying an automated valuation model (AVM) instead of an appraiser to maybe save some money, you're taking a huge risk. A.C. Read Appraisal Service wants you to know why your best option with a large investment like real estate is to call an appraiser.

It takes an expert to properly value homes with unique features.

So a computer returns an estimated value of $150,000. Did it account for the new industrial area that was constructed last year? The railroad tracks nearby with trains that blow their whistles every night? The school district that recently won an award? The desirability of its tree-lined street versus the next street over?

Assessed values are often inaccurate or out of date.

Many AVMs and free online services rely on public assessment records. In many states, for example, assessments may only be required every three years — the value may be nearly three years old in that case. Some states mandate that an assessed value not increase beyond a certain percentage, even if sales activity indicates the property has appreciated far more. When you use an AVM or free online service, you risk a lower value than reality.

Ensure comparable sales are truly like your property.

A computer might compare your subject property to another property with similar square footage sold three months ago a quarter of a mile away. Even if that "comparable" property is in a different, less desirable school district, fronts a four-lane, 55 M.P.H. street, and is flood-prone. Or even if the property was sold under duress, such as in a divorce situation, or not at arm's length, such as to a family member. A computer simply does not know all the adjustments that might need to be made to a "comparable" property's sales price.

Appraisers are the first to know when values are going up or down in a market.

Automated valuations use data from recent, nearby sales. If those sales were completed at the peak of a local housing market, the computer will think the trend is going up. Even if a professional appraiser knows that the overall neighborhood is beginning to experience a downturn. As a lender, don't get stuck with a property that's been overvalued by a computer.

With an appraiser, there is no conflict of interest.

Free online home values are often farmed out to real estate agents in your area, who use the service to get your listing when you decide to sell. The best way to do that is to impress you with their confidence that they can get a higher price for your property. If they tell you your property is "worth" the high end of what they believe they can sell it for, the theory goes, you're more likely to sign a listing agreement. With most things, it's best to "under promise and over deliver" — but the opposite is true when you use a free online home value service.

Know for sure that the house is really there!

A computer can't so much as drive by a house to see if it's actually located where it's supposed to be, has four walls and a roof, and really is a four bedroom split level and not a one bedroom shack.

Be assured the person determining your property's value has the right credentials, education and experience.

When you work with a licensed appraiser, you can be confident we're highly qualified, ethical and prepared to complete your assignment professionally - and with good judgment. Can the qualifications of a free online estimate really compare to an appraiser's? And if you're relying on an automated valuation, you're cheating yourself out of an appraiser's education, experience and expertise.