AVM Glossary

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  • Assessment Level
    The common or overall ratio of assessed val- ues to market values.
  • Assessment Maps
    See cadastral map.
  • Assessment, Original
    (1) The official act of the assessor in discov ering, listing, and appraising property for tax purposes up to the point at which the assessment roll is first filed for public inspec tion. (2) The act of assessment which first places a property on the assessment roll for the particular assessment date; the agency that performs this act is the original assessing agency (or jurisdiction). (3) The valuation at which property is listed in the assessment roll at the time it is first filed for public inspection.
  • Assessment Period
    (1) The period beginning with the assessment date and ending with the date on which the assessor is required to complete the original assessment. (2) Sometimes used synony mously with assessment year.
  • Assessment Progressivity (Regressivity)
    An appraisal bias such that high-value properties are appraised higher (or lower) than low-value properties in relation to market values. See price-related differential.
  • Assessment Ratio
    (1) The fractional relationship an assessed value bears to the market value of the property in question. (2) By extension, the fractional relationship the total of the assessment roll bears to the total market value of all taxable property in a juris diction. See level of assessment and fractional assessments.
  • Assessment Ratio Study
    An investigation intended to determine the assessment ratio and assessment equity.
  • Assessment, Retrospective
    An assessment made after the close of a tax year on property that was legally assessable, but was not listed for taxation during such year.
  • Assessment Roll
    The basis on which the property tax levy is al located among the property owners in a jurisdiction with taxing powers. The assessment roll usually lists an identifier for each tax able parcel in the jurisdiction, the name of the owner of record, the address of the parcel or the owner, the assessed value of the land, the assessed value of the improvements, applicable exemption codes, and the total assessed value. Synonyms include "cadastre," "list," "grand list," "abstract of ratables," and "rendition."
  • Assessment-Sale Price Ratio
    The ratio of the assessed value to the sale price (or adjusted sale price) of a property.
  • Assessment, Standardized
    A system of property tax assessments based largely on the uniform application of established rules and principles. Note: Standardized assessment is usually manifested by the use of land value maps, depth and corner influence tables, building classification and cost schedules, reproduction cost and depreciation schedules, and the like.
  • Assessment, Statutory
    Valuation of a property in a specified use at an amount specified by law (for example, a golf course will be assessed at ten dollars per acre); most often used for mineral prop erties and open space.
  • Assessment Year
    (1) A year beginning on the day after the assessment date and ending on the assessment date in the calendar year next following. (2) The 365 days beginning with the appraisal date.
  • Assessor
    (1) The head of an assessment agency; sometimes used collectively to refer to all administrators of the assessment func tion. (2) The public officer or member of a public body whose duty it is to make the original assessment.
  • Attribute
    Characteristic of a property.
  • Audit
    A systematic investigation or appraisal of procedures or operations for the purpose of determining conformity with specifi cally prescribed criteria.
  • Audit Program
    The procedures undertaken or particular work done by an accountant in conducting an examination.
  • Audit Trail
    A set of records of the changes made to another set of records.
  • Automated Valuation Model
    An automated valuation model (AVM) is a mathematically based computer software program that produces an estimate of market value based on market analysis of location, market conditions, and real estate characteristics from information that was previously and separately collected. The distinguishing feature of an AVM is that it is a market appraisal produced through mathematical modeling. Credibility of an AVM is dependent on the data used and the skills of the modeler producing the AVM.
  • Average
    The arithmetic mean.
  • Average Absolute Deviation
  • Average Deviation
    The arithmetic mean of the absolute devia tions of a set of numbers from a measure of central tendency, such as the median. Taking absolute values is generally understood without being stated. The average deviation of the numbers 4, 6, and 10 about their median (6) is (2 + 0 + 4) ÷ 3 = 2. The average deviation is used in computing the coefficient of dispersion (COD).
  • AVM-Assisted Appraisal (AVMAA)
    With an AVM-assisted appraisal, an experienced state-licensed or state-certified appraiser develops a USPAP-compliant appraisal based on the results of a reliable AVM.
  • AVM Cascade
    A process that uses a ranking of AVMs (aka “Model Preference Table”®) in conjunction with user-defined logic to determine when to accept an AVM value or go to the next model in the ranking.
  • Back-testing
    An AVM Back Testing environment is different from an AVM test environment. For an AVM test, by definition the benchmark value is based upon a recent verified sales price, but for AVM Back Testing the benchmark value is based upon an available (reconciled) appraised value that is (usually) not supported by a recent sale. The AVM(s) predict the appraised value and standard test metrics are applied. This outcomes analysis is compared to how the AVMs are employed in a production environment in lieu of the traditional valuation process.
  • Base-Home Approach
    A method of appraising single - Family residential properties whereby each residence to be appraised is compared with one having common or typical characteristics and of known value, called the base home, and differences between the two in terms of condition, size, number of garages, and the like are weighted by the appraiser in the determination of the value of the property to be appraised.
  • Base-Lot Method
    A method of appraising land parcels whereby each parcel to be appraised is compared with a parcel having common or typical characteristics and of known value, called the base lot, and differences between the two in terms of location, size, shape, topography, and the like are analyzed by the appraiser in estimating the value of the lot to be appraised.
  • Benchmark
    (1) A term used in land surveying to mean a known point of reference. (2) In property appraisal, a property of known value and of known effective age and replacement cost. (3) By extension, a model property to be used in determining by comparison the grade or quality class of other properties.
  • Benchmark Value
    The market value against an AVM’s value predictions will be compared for performance testing. Recent, arm’s length transactions are preferred.
  • Bias
    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.

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/)