AVM Glossary

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• Factor(1) An underlying characteristic of something (such as a house) that may contribute to the value of a variable (such as its sale price), but is observable only indirectly. For example, construction quality is a factor defined by workmanship, spacing of joists, and materials used. Factor definition and measurement may be done subjectively or by a computer-assisted statistical algorithm known as factor analysis. (2) Loosely, any characteristic used in adjusting the sale prices of comparables. (3) The reciprocal of a rate. Assessments may be equalized by multiplying them by a factor equal(...)
• Failure MagnitudeAn AVM Performance Metric that measures a combination of accuracy and precision. The mean absolute error percentage sales error for properties for which the AVM fails to predict selling prices to within +/- (a given percentage, for example, +/- 15%).
• Failure MAPEAn AVM Performance Metric that measure a combination of accuracy and precision. The median absolute error percentage sales error for properties for which the AVM fails to predict selling prices to within +/- (a given percentage, for esample, +/- 15%).
• Failure RateAn AVM Performance Metric that measures a combination of accuracy and precision. The percentage of properties for which the AVM fails to predict selling prices to within +/- (a given percentage, for example, +/- 10%).
• Federally Related TransactionAccording to the federal banking agencies’ appraisal regulations, any real estate-related financial transaction that requires a real estate appraisal.
• Fee AppraisalAppraisal of properties one at a time for pay.
• Fee SimpleIn land ownership, complete interest in a property, subject only to governmental powers such as eminent domain. Also fee simple absolute. See estate in fee simple; fee; and absolute ownership.
• Field ReviewThe practice of reviewing the reasonableness of assessments by viewing the properties in question, sometimes by examining their interiors but more often by looking at their exteriors.
• FlowchartAny of a number of kinds of graphic descriptions of an algorithm, showing the operations, data flow, equipment, and so on.
• Forecast Standard DeviationA measure of the expected error range of an estimate by an AVM, expressed as a percentage or a decimal. The lower the FSD, the higher the confidence in the precision of the estimate. Example: if the FSD for an estimate is 10%, then the expectation is that 68% of the time the actual market value will fall within +/- 10% of the model estimate.
• Forecasted ValuationEstimate of value for subject property at a point in time in the future.
• Forecasting ModelsAn AVM that forecasts future changes in property values based on a wide range of macroeconomic variables.
• ForeclosureThe legal process by which a lien on a property is enforced.
• Frequency DistributionA table showing the number or percentage of observations falling in the boundaries of a given set of classes. Used in ratio studies to summarize the distribution of the individual ratios. See class; histogram; and mode.
• Functional ObsolescenceLoss in value of a property resulting from changes in tastes, preferences, technical innovations, or market standards.
• Functional UtilityThe ability of improvements to satisfy market standards and demands.
• FurlongA land measure of 1/8 mile or ten chains or forty rods.

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/)