AVM Glossary

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  • See Mann-Whitney test.
  • Parameter uncertainty happens because we don't know the exact, or "best" values in a population. We can only take a good guess based on sampling. Uncertainty in statistics is measured by the amount of error in an estimate of the mean or average value of a population.
  • An improvement that does not develop a site to its highest and best use; usually a violation of the principle of conformity. Contrast overimprovement.
  • Annual publication of the Appraisal Standards Board of The Appraisal Foundation: "These Standards deal with the procedures to be followed in performing an appraisal, review or consulting service and the manner in which an appraisal, review or consulting service is communicated. . . .Standard 6 sets forth criteria for the development and reporting of mass appraisals for ad valorem tax purposes or any other universe of properties" (p. 1).
  • A mean in which each value is considered only once. See weighted mean.
  • The percentage of valuations returned by an AVM that meet the organization’s predetermined acceptance criteria - usually related to predictive accuracy or confidence score. For example, suppose a user defines a successful valuation as a value estimate that is within plus or minus 15% of its corresponding benchmark. If 500 of the 600 returned values from a total sample of 1000 properties met the user’s definition of an acceptable valuation, then the usable hit rate would be expressed as 500/1000 or 50%.
  • Rules that establish when a particular AVM is appropriate for use. These policies frequently include property and transaction-related restrictions (e.g., FICO score, LTV, etc.).
  • (1) A grouping of properties based on their use rather than, for example, their acreage or construction. (2) One of the following classes of property: single-family residential, multifamily residential, agricultural, commercial, industrial, vacant land, and institutional/exempt. (3) Any subclass refinement of the above for example, townhouse, detached single-family, condominium, house on a farm, and so on. See property use category.
  • A code (used on a property record form) to indicate a property's use class or, less often, potential use.
  • See highest and best use.
  • (1) The value of property in a specific use. (2) Property entirely used for a specific purpose or use that may entitle the property to be assessed at a different level than others in the jurisdiction. Examples of properties that may be assessed at use value under the statutes include agricultural land, timberland, and historical sites. Compare value in use.
  • Estimated normal operating life in terms of utility to the owner of a fixed asset or group of assets.
  • See Uniform Standards of Professional Appraisal Practice
  • (1) The quality of a property or service that enables it to satisfy human wants. (2) The satisfaction obtained from the goods and services that a consumer consumes.

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/)