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What's My Home Worth? CMAs vs. AVMs

Alphabet_soupAn exciting element of the Tomato platform is the fortune we have to showcase the efforts of some very capable contributors. 

Today we introduce a new member to our “vine,” Mr. Marc Grayson.  Marc has been a big fan of the Tomato, and we are now able to return the favor of his readership by giving him the floor for the day.  Marc is the president and founder of the National Institute of Webographers, the owner of the REAL ESTATE WEBOGRAPHER certification found at

Here’s his piece on breaking down the distinction between the traditional Comparative Market Analysis and the newer Automated Valuation Model.  Enjoy.

What’s My Home Worth? CMAs vs. AVMs

Given the online real estate arena, the consumer question of “What’s My Home Worth has spun technology providers to implement various services to answer that basic question. At the core of this question lends itself to thorough analysis between the CMA (Comparative Market Analysis) versus the AVM (Automated Valuation Model). Not only has automated values fed the hunger for the self-serving consumer as exemplified with Zillow and their Zestimates (over 3 million visitors each month at, but AVMs will be utilized more by real estate agents and brokers in 2007 and beyond.

During 2 year development of coursework for the REAL ESTATE WEBOGRAPHER™ certification at, much research on the Automated Valuation Model (AVM) has lent itself to its applicability in the CMA-process. Bottom-line, we will see more real estate professionals using the AVM.

CMA Defined

Comparable Market Analysis (CMA) is a report generated by agents and brokers that include: (1) a market value of a property and (2) comparable sales information of properties with similar “size” and “shape”. The market value is an educated estimate by an agent, guided by an agent’s own personal knowledge of market activity and the use of recent comparable sales. The report may expand to include community information and personalization / branding by the agent.

AVM Defined

Automated Valuation Model is a process to establish a market value of a property through “scientific” measures, versus a human’s inclination. AVM reports will commonly include property valuation, comparable sales, and demographic information. Data sources of AVM providers may include public record information databases of county, tax records, census, in addition to other proprietary databases.

In short, the AVM and CMA (using the standard MLS-CMA tool) have many differences and similarities. The table below looks to engage those comparisons, and provide details into better explaining the AVM, which may not be of readily understood by real estate professionals.


Qualitative Comparison Chart




Data Source

Public information records (i.e. county, tax records, proprietary databases)


Property Valuation Model

Generated by scientific algorithms and formulas

An estimate based on the agent’s market knowledge

Primary Audience

Lending & financial institutions, consumers, real estate professionals

Consumers, real estate professionals

Property Search Criteria

Property Address

Sq footage, # of bedrooms, lot size, # of bathrooms, amenities, garage size, property type, avail. rooms



Speed of the real estate professional
(sometimes lengthy if a custom report)


Can be accurate given a strong valuation algorithm and depth / breadth of data sources and recent comparables

Accurate given sound data in the MLS, search techniques in MLS and agent’s inclination

Current Comparable Sales Data

Commonly a 30-day delay before sale information is registered into databases

Real-time from MLS

Trend Analysis
(“listing” vs “sold” prices)

Sometimes, but can be a challenge as "listing" price is commonly not recorded in Public Information Sources, only “sold” price

Manually performed, but "listing" prices vs. “sold” price can be captured.

Charts & Graphs

(Data Representation)

Sometimes included

Manually performed

Agent Personalization

Never before included
(until now)

Manually performed

Photos of Comparables

Not included

Commonly included in the MLS

What’s My Home Worth – Consumer Perspective

It’s known the web-savvy consumer looks to be involved in the real estate process. Many real estate bloggers have noted real estate consumers who find homes on, take those listings to their agent and say, “I want to see these homes.” Given today’s eager consumer, it’s important to focus on two major differences in how AVMs and CMAs are generated from consumer websites:

  • Real-Time - AVM data is presented to users in “Real-Time”, whereas a custom CMA takes “time”. Consider lead aggregators whose member agents are provided a lead, then must create a custom CMA with a suggested turn-around time of 48 hours, whereas an AVM is instant information.

This fundamental point has been noted at Yahoo! Real Estate, where the service for “What’s your Home Worth”, once powered by Homegain (custom CMA, waiting time) is now powered by Zillow (Automated Value, real-time).

To combat such issues, Homegain has provided comps from AVM sources as found at as launched just this month; giving the consumer some information in “real-time”, with the hopes they still request a custom CMA.

  • Search Criteria – AVM reporting commonly requires just street address and zip code for report generation…that’s it! In-comparison to forms on lead aggregator sites or that of today’s agent website with a submission form for “Home Value Analysis”; numerous fields such as sq footage, number of bedrooms / bathrooms, garage size, etc are solicited. For example purposes, here are 2 real estate websites of agents / brokerages in the Phoenix metropolitan who utilize such a form.

After efforts in search engine optimization to reach such sites, the consumer is left to input much information, to obtain reporting they must wait to receive?!?

Outside the online arena, where the agent has established a relationship with a consumer, time to generate a custom CMA is not a premium and can take its due process.

CMA MLS-Tool Issues

The two focal reports called 2005 REALTOR® Technology Efficiency Study dated February 23, 2005 and May 03, 2005 respectively, gave insight to the issues related to today’s MLS CMA-tool The MLS CMA-tool is a good resource for conducting basic research for a local market. Comparable sales are used to develop a presentable CMA to buyers and sellers. However, it has been noted that deficiencies exist in the categories of: ‘Data Accuracy‘, ‘Need to Supplement the MLS’, ‘Lack of Flexibility‘, ‘Lack of Personalization‘, and ‘Deficiencies in Data Representation (charts & graphs)’.

Can AVMs provide as a solution? Why are AVMs popular now? Where did this AVM craze evolve from?

AVMs - Lending Community Perspective

AVMs have been a popular resource in the financial and lending community for decades. They are utilized to validate and supplement the findings of traditional appraisals typically used in the underwriting process. Certain types of AVM products can be used in lieu of traditional appraisals when financing requires an expedited turn-around. Traditional appraisals cannot be fully replaced by AVM technology from the eyes of the lending community. Rather, AVMs are used to supplement appraisal information and to serve as an additional research tool.

Will AVMs be used in CMA procedures by agents and brokers?

AVMS – Agent & Broker Perspective

Extensive research conducted by the National Institute of Webographers, LLC concluded that the next logical evolution in the use of AVM technology would be among real estate agents, brokers and their assistants as part of the CMA-process, to combat issues found with the MLS CMA-tool. It must be understood that not all AVM providers are “created equally”. Let’s look at an example of an AVM report provider of

Demographic Data. Many AVM report providers will include additional demographic data that would never be found in the MLS. The partial screenshot from an AgentAVM report from details such data for a target property. A Crime Index is provided in addition to the % Homes Owned and % Homes Rented within a specified radius of the target property.

Valuation Range. Although a computed Value $841,000 is reported, the agent has a little “wiggle room” when suggesting a listing price given a High Value of $960,0o0 and Low Value of $600,000 as shown above.

Personalization. Dependent on the AVM provider, a new wave of AVM reporting such as (“Where the CMA meets the AVM”), provides personalization of the report as shown below.

A full, sample AgentAVM report can be found at

CMA Meets the AVM – The Dawn of “Hybrid Reports”

Given AgentAVM and other AVM service providers tailoring solutions for use by real estate agents, we now see such hybrid reporting (AVMs reports with personalization like that of a CMA) being used in the following fashion by real estate agents:

Seller’s Agent

1. Hybrid reports can serve in lieu of a full Seller’s CMA, especially when time is at a premium because the AVM can be generated in a matter of seconds. Considering that a Seller’s CMA is designed to “win the listing” its lifespan is short-lived, perhaps no more than a few days.

2. If the agent has a short “window” to meet a potential seller, ample time may not be available to generate a traditional CMA. AVMs only require a property address to generate a report, whereas a CMA requires substantially more information.

3. In “brick & mortar” agencies, office assistants do not need to solicit all types of information from potential sellers who walk-in or call by phone. All they need to obtain for the AVM is the property address. If an agent or office assistant is successful in obtaining specifications about a property using an MLS data sheet, the professional can “cross check” property specs, (i.e. number of bathrooms, sq footage and other data) that a potential client may have incorrectly stated. AVMs do report property specifications as well.

4. Hybrid Reports allows for agents to “cross-check” their own suggested listing value; thus, the Hybrid Report acts as a “second-opinion” to review the agent’s suggested listing price. With inclusive “high” to “low” property values reported in the Hybrid Report, the agent is now thinking in terms of what the prospective Buyer’s purchasing range may be, since AVM data is widely used by lending institutions.

Buyer’s Agent

1. Hybrid Reports can serve in lieu of a full Buyer’s CMA if there is simply not enough time in an agent’s schedule. Generating the report can “buy” the agent time until a custom, Buyer’s CMA is completed.

2. Hybrid Reports can act as a supplemental source of market data and comparable sales information when completing a custom, Buyer’s CMA. Agents are using public information sources like county records and tax records to supplement and adjust the “holes” in MLS CMA reporting.

3. The Buyer’s agent can use Hybrid Reports to cross-check the suggested listing price of other sellers. This second opinion helps to better evaluate if a property is ambitiously listed too high, appears to be a real value, or is lower than the reported value range as reported in Hybrid Reports.

4. Using the value range from Hybrid Reports helps to evaluate the Buyer’s possible purchasing range.

As a back-office tool, Hybrid Reports such as AgentAvm can replace and supplement many of the activities involved in generating a CMA.

The Future of CMAs and AVMs

It’s believed in 2007, we will see more service providers developing services for real estate agents & brokers which include AVM reporting. Due note, AVMs cannot fully replace the CMA and its inclusive market knowledge bestowed by the agent.  At minimal, it can provide as a value-add when providing property information to consumers, or at minimal, provide as a supplemental source of data.

Marc Grayson is the president and founder of the National Institute of Webographers, the owner of the REAL ESTATE WEBOGRAPHER™ certification found at He has provided consultation to real estate agents and brokers in web-based technologies and implementation. In addition, he has provided consultation to Fortune 500 companies during product development of real estate technologies. He is an advocate for real estate technology adoption and implementation.

Thanks a ton Marc.  We look forward to having you back.

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Interesting, but AVMs are inaccurate in most cases, except for highly uniform, cookie-cutter neighborhoods. Also, the price of a home can differ (often by a lot) due to other competing homes. It takes a trained eye and someone who know what buyers value and what they don't in given market to make an accurate appraisal. For example, two identical homes across the street, but one belongs to an HOA with public pool access so it'll be more valuable.

Similarly with such specialized markets as downtown condominiums. Views and floorplan are everything there.

I personally use a very brief CMA request form on my site. All I need is address, bedrooms, baths, etc. and property condition. I can get the rest from MLS/Tax records and further info isn't really necessary for a first draft CMA (which is most of the time *way* more accurate than Zillow).

AVMs might be good for following general market trends, but will never be accurate enough for selling (until we have sufficiently good AI :)

I sell on Lake Martin, AL - a second home market. I don't know if other realtors have had the same experiences - but I find that CMAs are hard enough to do - let alone AVMs. When you are pricing lake front property, so much of the value resides in the view, the waterfront, etc. Even on properties with the same amount of waterfront, one lot can be in the back of a cove, and another could be on a point, so they have radically different value. As a former math major, I have tried in vain to come up with some unified theory of pricing, but it just is not happening. Maybe our market is different, but with much of the lake in rural counties, I can't see a computer model driven formula like AVM coming within 10% of market value with any consistency (in the near future).

These are very good points. Let's consider the following:

Given the lifecycle of a transaction, let's consider the stage when you possibly have not met the potential seller, nor viewed their property in-person. What do real estate professionals provide at this juncture for "What's My Home Worth"? Could a Hybrid report (AVM report w/ personalization of a CMA) be used in very early stages where little information is known (but the consumer wants information now). Do you buy time to generate a custom CMA and say I'll send you something in a couple of days? How much effort is put into a CMA when it appears the consumer is browsing around for a listing agent?

Given the first John's statement of obtaining information from MLS / Tax records, AVMs will use public information sources (which commonly include Tax Records). Could a Hybrid Report not only provide you such information, but also provide the opportunity for a print-ready report to provide to consumers, site-visitors (if you deem the report to be "close enough")?

In short, I'm curious to:

1) When agent's take the time to perform a custom, in-depth CMA, and when its appropriate to provide a general, simple report that doesn't involve much time? (One would think its when initial contact occurs)

2) With the example of, is information such as crime index, "% homes owned" vs "% homes rented", flood information, appreciation rates readily available in the MLS? If not, can it provide as valuable if producing a custom CMA? Maybe distinguising your custom reports from other agents?

3) Given the Sellsius Blog on UnZillowable features, I believe this holds true for determining a true listing price (AVMs cannot perform that, but act as a source of data to assist in "thinking"). Here, we will play devil's advocate when considering AVMs, given potential buyers making these statements

-- Barking Dogs - "great, we have 3 large dogs so our neighbors won't care".

-- Fresh Flowers & Plants from Staging the Exterior - "I have allergies and this house would not be well suited"

-- On the 18th Hole of a Golf Course - "I'd be picking up golf balls in my backyard all the time, and I can't have a solid fence for privacy due to the HOA".

Again, AVMs cannot consider such features, but at the end of the day, its the potential buyers who walk in and make those personal determinations for themselves.

Don't believe there is a right or wrong, but the fact the lending industry has been using AVMs as part of their underwriting process, at least makes AVMs worthy of being discussed.

As a real estate agent in a rural area of Northern California, Zillow would never work. We also don't have cookie cutter homes - we have various size acreage, from less than an acre to 40 acres - country homes and in-town older homes. Prices here also depend on how close you live to town. No - it absolutely would not work here.......

I think its important to note Zillow is not the primary exemplifier of AVMs. As of writing this, I'm unsure what they use in-terms of data sources and algorithms to produce a value. I believe it is not a traditional AVM, but something "home grown".

Traditional AVM providers include those of First American, Fidelity, and others.



I take the middle ground with the first CMA. It's not overly detailed because I must see the property and others on the market to make a final decision, but it's also not just a simple $/sq.ft. average.

I'll give you an example. A 2700 sq.ft 3/2 house is in a neighborhood with 3000 sq.ft. 4/2 and 5/3 homes as well as 2000 sq.ft. 3/2 homes that are newer. I also see a pattern, glancing at the sales records that there are a lot of those smaller 3/2 homes and they sell very briskly while 5/3 homes take a long time to sell. All this info can be obtained within minutes.

Now, how do you price this home? Closer to the 3000sq.ft. homes or closer 2000sq.ft. ones? It's a tough call that a computer simply can't make. I know from experience that 2700 ft. is overkill for a 3/2 home, and most buyers will prefer the smaller ones. The AVM won't know that. This is actually a real live example from Austin, of a home that was stuck in between, sort of, and took forever to sell. The original listing agent was a dumb robot who simply computed $/sq.ft. without even thinking and priced it too close to the 4/2 and 5/3 homes in that area.

Also, all those supplementary reports, crime stats, appreciation rates, etc. They're not in the MLS, and not really needed for the CMA. I also publish monthly market appreciation rates in my newsletters. Takes 10 minutes. I pull the data into excel, and I'm done.

A good smart agent can outperform AVM any day, and do it quickly, but the majority of agents are idiots and have no creativity or desire to learn, so as long as they continue to spit out mindless CMAs that don't say anything, maybe there's a place for AVMs.

I'm a big fan of your newsletter, but your article on the
AVM reports really prompted a response from me. I have to
admit that I was intrigued by the possibility of spending
very little time to get an accurate report of a home's
market value with just the address, so I signed up for a
free 30-day trial. What I discovered was that these
valuations are about as accurate as a valuation
(useless, but don't get me started on Zillow)!

I tried 3 of my listings to try to get a broad view.
One home was last on the market as vacant land (15 years
ago) and the AVM program didn't even check the tax records
to see that now there is a big house, several
outbuildings, etc that have improved it's value beyond raw
The next home is a 30 year old house that has been added
on to and totally remodeled. All AVM did was compare it
to other 30-year-old houses (that hadn't been remodeled)
without looking at the new square footage. What good is
The third house is a 2-yr old house, so I hoped this
valuation would be the closest yet. But I was
disappointed again when AVM compared it to homes that were
closer to town on more usable acreage (therefore gave it a
valuation that was too high).

What this exercise did for me was confirm that CMA's done
correctly, look at the whole property, upgrades,
additions, proximity to services (town), usable acreage,
and compare it to similar homes. It made me feel good to
know that a realtor's skills are not easily replaced by a
computer program.

I will not be renewing my subscription when my 30-day
trial is up!

John1, Thanks for answers. Yes, its true, stellar CMAs can be done in a short amount of time given the artform you have perfected. CMAs are a mark of professionalism and demonstrate more than a valuation, but market knowledge. Its of an agent's own special sauce, and their own science.

As my original post states, AVMs cannot replace that of a CMAs (nor that of BPOs or actual appraisal).

Susan, its important to note that in public information sources, additions are not noted (nor a refinished kitchen) and other major elements of change. Essentially, facts like additional sq footage since the last sale, will reported the next time the home is sold and recorded in county records. AVMs are regretfully not perfect science. Sometimes, reporting can be like that of the MLS CMA-tool, where making adjustments are desired.

Its important to bring awareness to the AVM, as its creeping into the online arena at a rapid pace.

Is there a "space" for real estate agents to use AVMs?

Will the "science" of AVMs improve?

The AVM is a hot topic of discussion at candidates at and amongst our staff!

There is another interesting article by Bob Bruss which details how to get appraisals of homes and condos.

Here are some interesting quotes:

[Bob] "During the last 10 years, there have been many attempts to make real estate appraisals more accurate, especially with automated valuation models (AVMs). Mortgage lenders would be thrilled to be able to verify the exact market value of a house by pressing a few buttons on a computer. Although that day might be coming, it has not yet arrived."

[Marc] As commented by the first John, there is a long way to go with Automated Valuation in terms of AI (Artificial Intelligence)...

[Bob]"Although computers have changed real estate appraisals, there is no substitute for the experience of a realty appraiser to interpret the recent sales prices of comparable nearby houses and condos, which determine the market value of a specific home"

[Marc] Agreed, computers and AVMs cannot replace the knowledge of experts, when in-person, to evaluate a property.

[Bob] "However, when houses and condos are relatively similar to nearby houses, AVMs can be very valuable to help estimate market values. But appraisers will always be needed to verify valuations, especially in neighborhoods of unique one-of-a-kind homes."

[Marc] This is interesting given the comments of the first John, that accuracy can be true of that of cookie-cutter neighborhoods, or that of Susan that if a property is not static, undergoes upgrades, there will be issues in valuation by AVMs. When properties remain unchanged, and the neighborhood/market is "calm" and neighborhoods are similar, they could be accurate.

[Bob] "Although computers have changed real estate appraisals, there is no substitute for the experience of a realty appraiser to interpret the recent sales prices of comparable nearby houses and condos, which determine the market value of a specific home."

[Marc] Agreed. Individuals trained to appraise properties bring accuracy. AVMs may be used as a source of research. But an in-person, in-house appraisal will always reign king.

I just remarked to a group of realtors a couple weeks ago that finding a correct price is more of an art than a science. I think that is especially true in areas where we don't have a lot of developments with similar homes.

I recently did an online CMA in Anchorage, (pop 300,000) and noticed that it was easy to find very similar listings within the immediate neighborhood. That makes it easy.

But in my area most homes and locations are so varied that any electronic system is bound to be very inaccurate. Coupled with the fact that we currently have a large inventory of homes, if a home isn't priced right on the money, it will just sit on the shelf.

I think these systems have a place in large markets with many large developments. They would likely work best in areas like Pheonix and Las Vegas.

John1 Wrote: "A good smart agent can outperform AVM any day, and do it quickly, but the majority of agents are idiots and have no creativity or desire to learn, so as long as they continue to spit out mindless CMAs that don't say anything, maybe there's a place for AVMs"

Absolutely brilliant! John you have said what so many others have tried to say about AVMs, Zillow, and the great hordes of poorly trained liability magnents called "agents." In my rural resort town, CMAs are tricky (so are appraisals) and we see lots agents - new,old,lazy, etc. do them poorly. An AVM can compete here. But as I feel sorry for those homeowners who make decisions based on poor advice from a poor agent, so do I feel about bad data from a bad program.

Geordie, yes a custom-CMA by a seasoned agent is of great efforts. Regrefully, the online arena has fed the hungry, sometimes impatient consumer. For me, that hunger was fed when Yahoo! Real Estate's "Whats My Home Worth" service changed models from agents serving that information, to a computed valuation.

Given my background in computer science, we had a saying of "garbage in, garbage out"...that w/ the bext computational algorithms, data could be a limiting factor.

This was true of my time at the University of Arizona's, Artificial Intellience (AI) lab ( redirects you to an "old" bio there).

In this lab, I witnessed many AI projects, like one that would mine crime databases to make conclusions on open cases for example. Automating a process that was previously the work of seasoned and trained detectives, is not a simple feat. In short, greater analysis and "clues" can be provided to detectives for example, but a computer can never tell you "who did it" with 100% accuracy...but raise some points of interest.

So is true of an AVM. It cannot fully replace the efforts of a seasoned agent, but maybe provide them "clues" or a supplemental research. In short the data used for AVM-generation has a journey ahead.

Thanks again to the Real Estate Tomato for allowing me to share a little "juice".

If anyone would like to personally reach me, my email is


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