AVM Glossary

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  • r

  • See Property.
  • See Property.
  • Real property that might be vacant land or an improved parcel of land devoted to or available for residential use. See property use category.
  • The difference between an observed value and a predicted value for a dependent variable.
  • A method of arriving at the unknown value of a property component by subtracting the known values of other components from a known overall value.
  • The value of the property after cleanup of environmental contamination. This may be more or less than the original value depending on counterbalancing effects of stigma and improvements to plant efficiency.
  • Most AVMs return a result code that explains the outcome of each submission. For instance, result codes should identify when a successful valuation was returned, why a valuation was obtained but not returned (e.g., the value fell below the model’s minimum confidence score thresholds), or why a valuation was not obtained (e.g., ‘unable to verify address’ or ‘invalid property type’).
  • Estimate of Value for subject property at a point in time in the past utilizing data prior to a specified date of stated value.
  • The square root of the average value of the sum of the squares of the differences between values in a set and the corresponding values that have been accepted as correct or standard. Used to measure map accuracy.
  • Right Tail > 20% or “RT20” is the percentage of properties whose AVM valuation exceeds its corresponding selling price by more than 20 percent. RT20 indicates the potential overvaluation that can expose a lender to more risk than factored into an original loan-to-value ratio (typically 80 percent).

  • s

  • A sale in the open market between two unrelated parties, each of whom is reasonably knowledgeable of market conditions and under no undue pressure to buy or sell.
  • A sale, especially of chattels, in which the transfer of title is made to depend on the performance of a condition subsequent to the making of the sales contract and delivery of goods. Note: The most common condition is that the remainder of the purchase price be paid. Property held under a conditional sales contract may be repossessed without foreclosure proceeding, and the former holder has no equity of redemption. Compare mortgage, chattel.
  • A sale made to meet the immediate and pressing needs of the seller at whatever price the property will bring.
  • A sale made pursuant to law; usually an auction sale that is involuntary on the part of the owner.
  • A sale and subsequent lease given by the buyer back to the seller as part of the same transaction.
  • A sale in which neither the buyer nor the seller acts under legal or economic compulsion, in which both parties are reasonably well informed, and in which both are primarily actuated by economic motives. Compare value, market and sale, arm's length.
  • A sale designed to correct defects in a title, create a joint or common tenancy, or serve some similar purpose. Such sales generally are transacted at only a nominal price.
  • See price, sale; price, adjusted sale.
  • The reciprocal of the assessment sale price ratio.
  • The amount of down payment, the interest on the mortgage, and information on points and other fees involved in a real estate sale. Also called "terms of financing" or "financing terms."
  • One of the three approaches to value, the sales comparison approach estimates a property’s value (or some other characteristic, such as its depreciation) by reference to comparable sales.
  • (1) Information about the nature of the transaction, the sale price, and the characteristics of a property as of the date of sale. (2) The elements of information needed from each property for some purpose, such as appraising properties by the direct sales comparison approach.
  • The ratio of an appraised (or assessed) value to the sale price or adjusted sale price of a property. See "Assessment-sale price ratio."
  • A ratio study that uses sale prices as proxies for market values.
  • A comparison of the percent sales errors (or another metric) after creating price bins or tiers. These stratified price bins may be chosen using specific monetary values or they can be chosen to provide (roughly) equal numbers of sales in each bin.
  • Actual properties submitted to an AVM Vendor for evaluation. Subset of Population.
  • The number of properties submitted to the AVM Vendor for valuation.
  • The error reflected in ratio study statistics that results solely from the fact that a sample of the population is used rather than a census of the population.
  • A graphic means of depicting the relationship or correlation between two variables by plotting one variable on the horizontal axis and one variable on the vertical axis. Often in ratio studies it is informative to determine how ratios are related to other variables. A variable of interest is plotted on the horizontal axis, and ratios are plotted on the vertical axis.
  • Items of a structure that have a shorter life than the basic structure. For example, roofing, water heaters, floor covering, and interior finish.

Sources:

a)       AVMetrics

b)      AVMs 201: A Practical Guide to the Implementation of Automated Valuation Models, Jim Kirchmeyer, 2008.

c)       IAAO 2015, Glossary for Property Appraisal and Assessment, 2015. (2013 online: https://www.iaao.org/media/Pubs/IAAO_GLOSSARY.pdf )

d)      Collateral Assessment & Technologies Committee, Summary of Definitions & Terms, 2006.

e)      Joint Industry Task Force on AVMs, IAAO Standard on AVM Glossary, September 2003. https://www.iaao.org/media/standards/AVM_STANDARD.pdf

f)        Appraisal Institute, Joint Industry Task Force on Automated Valuation Models, Work Group Terminology, 2005.

g) Merriam-Webster (https://www.merriam-webster.com/)