The degree to which an AVM or cascade tends to overvalue or undervalue subject properties. Analysts quantify an AVM’s bias by calculating the mean or median valuation error.
Related Articles:
- Using Appraised Values vs. Arm’s-Length Transactions for Testing AVMsUsing appraisals seems like a great way to get more benchmarks for testing AVMs, and since AVMs and appriasals are trying to do the same thing: predict sales prices, it seems intuitively appealing. However, there are some fundamental problems with using appriased values to test AVMs. Appraised values are subjective and inconsistent, and they introduce bias and compound errors. This article explains why arms' length transactions are the only appropriate way to test AVMs.
- AVM Regulation – Twists and Turns to Get HereThe regulatory environment was easier to read three years ago. Now, it's a tougher question, even though there's a Task Force Report with recommendations on AVM regulation.
- Feds to Lenders: Take AVMs SeriouslyRegulators are signaling that they are going to be looking at AVM testing. They are focused on valuation discrimination. This represents a change in the focus on AVMs and the need for all lenders to focus on AVM validation to avoid unfavorable attention.
- Introducing PTM™ – Revolutionizing AVM Testing for Accurate Property ValuationsAVM testing is broken and has been for some time, which means that we don’t really know how much we can or should rely on AVMs for accurate valuations. AVMetrics is proud to unveil our game-changing Predictive Testing Methodology (PTM™), designed specifically to circumvent the problem that is invalidating all current testing.
- What DOJ’s Disparate-Impact Rollback Doesn’t Change About AVM Fairness