Itâs not surprising that automated valuation models (AVMs) have cropped up seemingly everywhere. AVMs are extremely fast, and their presentation is impressive, boasting colorful charts, graphs, maps and supporting statistics. Theyâre also cost effective if you need to make a fast business decision, typically ranging from $5 to $45. Of course, the downside to using a single automated valuation model is getting your head around exactly how the estimate was created. To do that, youâll need to speak to the AVMâs creator â a bit implausible if youâre pressed for time. The other big drawback to AVMs is the potential risk factors they bring to the valuation. They depend heavily on the patchwork quilt of housing in many areas, erratic markets and the methodology of keeping and recording data â all of which are subject to potential errors.
The work and worry of multiple AVMs
Upon realizing the danger of relying on a single automated valuation model, many lenders have resorted to cautiously implementing multiple AVMs. The trouble here is that each AVM is ball-and-chained by its unique fulfillment platform and proprietary confidence score. As a busy lender, you have to ask yourself: Do I really have the time and money to compare valuations from different vendors and pick out the most accurate valuation for a property or area? The smart move would be to find a reliable resource that can do this for you â a tool that can organize AVMs based on accuracy, coverage and cost.
Whether youâre underwriting home equity lines of credit (HELOC) or performing other collateral valuation-related activities, what you look for in an automated valuation model is speed and economy. But an AVMâs hit rate and accuracy can vary. Fortunately, there are tools that can improve internal workflows and help to ensure conformity with todayâs federal collateral valuation guidelines. One such tool is EquifaxâsCollateral Value Connectorâ˘, which organizes AVMs in a cascade arrangement, ranked by accuracy. Enter a street address and accompanying ZIP code, and the connector selects the most appropriate AVM from top-tier AVMs in seconds. If an AVM is unavailable, the program cascades to the next best AVM. Both accuracy and reliability are then gauged by an independent, third-party vendor using extensive testing criteria, such as geography, confidence scores and accuracy.
Reports of abuses and errors have led to new requirements intended to provide greater transparency in the mortgage industry. In order to continue to participate in the real estate market, youâll have to demonstrate that the automated valuation model you intend to utilize has been validated and accurate. Relying on any single AVM can potentially expose you to unnecessary business and regulatory risks, and trying to deal with multiple AVMs can be costly and time consuming. The solution is to use accuracy-based aggregation tools that unite the benefits of using an AVM with the reliability and confidence of multiple AVMs tailored to your specific requirements.
Choosing the right automated valuation model can be complicated. Todayâs new breed of cascading tools can help you reduce both operational costs and risk by fully harnessing their power.
Author:Sean Hamers Phone: 619-309-9640 Dated: April 2nd 2018 Views: 1,210 About Sean: ...
View our latest blog posts in your RSS reader. Click here to access.
There are some people who have not purchased homes because they are un
"Suzanne Vazzana helped us sell our home in a difficult market. We are very pleased with the quality of the promotional flyers for our home, and successful open house. When our first buyers failed to perform, we started all over again with renewed enthusiasm and support from Suzanne. She worked tirelessly and was always available. Her personalized service is what sets her apart; she is never too busy to meet with you. When we wanted to extend our escrow process, Suzanne was ready with several creative suggestions. In choosing Suzanne as our agent, we looked for trustworthiness and experience. We also wanted someone who understands rehab and renovating from the inside out. A good listener, Suzanne is clear on what our needs and wants are and we are confident she will help us find our next home in the area we desire and negotiate for the right price.
Happy and satisfied customers in North County San Diego,
Milton and Roxy Sue"