Realtor.com is set today to introduce three new automated valuation models (AVMs), which will include home value estimates on listed homes and off-market properties, a reversal of the company’s former stance on only listing estimated valuations on off-market homes.
“We see a high level of interest from both buyers and sellers to understand their homes value,” Todd Callow, realtor.com’s vice president of product management, told Inman. “We, in the past, haven’t displayed it on a listing and deferred to an agent’s expertise.”
“We still think an agent is the best source for valuation, but we also felt that now is the time to introduce more context.”
Realtor.com is opting to list three different AVMs on each property, because the company doesn’t believe any single model has the right answer for every property. The company is choosing Corelogic, Collateral Analytics and Quantarium as its partners for the new tool, which will display all three valuations in both a list and graph format.
It chose those companies for the accuracy of their product and also because they are AVM providers in the financial industry, servicing banks, insurance companies and lending institutions. Callow said he wanted homeowners to know that when a lending institution or bank looks at their home this is the valuation model they use to determine whether to issue a loan and for what amount.
“The best way to help a user understand the value of the home was to share a survey of what we felt is the best available models out there,” Callow said. “So they can understand there are different viewpoints on what the value of a home is.”
The company declined to share the median error rate of the different AVMs, but said that when it’s live, eventually there will be a full explanation of how the value is calculated accompanying each estimate.
AVMs as a concept have often been maligned by real estate professionals, who believe that it could potentially undercut the work they do in determining the value of a home.
Realtor.com, has a robust partnership with the National Association of Realtors (NAR), allowing Realtors to create a free profile with their listings and data reports on those listings. Move, a subsidiary of News Corp, operates the online listing portal for NAR.
Callow said realtor.com engaged its Realtor clients throughout the entire process of debating the launch of the new AVM tools. He disagreed that Realtors as a whole aren’t supportive of AVMs, saying some like it and others don’t.
“In our experience, talking to both NAR and agents who are our customers and not our customers, the context matters,” Callow said. “Agents like to bring good, reliable objective data to their customers and layer on their expertise.”
“We want to make sure we provide the data in the right context so they would feel good about it,” Callow added. “We’ve done quite a bit of outreach to make sure we understand where they’re coming from and put together a solution they feel good about.”