When thinking about selling your house, you’ll usually start with figuring out what your house is worth. And if you’re like most people, the first thing you’ll do is look up your address on a real estate listing website, and get an automated estimate–most of which rely on Automated Valuation Models to estimate your home’s value. But how accurate are they, really?
Keep reading for a breakdown of how these Automated Valuation Models work, and why we think our Home Value Estimates provide our clients with a more accurate estimation of value.
How AVMs (Automated Valuation Models) work
The real estate industry has taken full advantage of today’s available technology by using AVMs, or Automated Valuation Models—which are computer-driven mathematical formulas that take into account property characteristics, local market information, and price trends to determine an estimated home value.
While AVMs can provide a relatively accurate price estimate, they are unable to account for the condition of individual properties. So home values won’t be able to take into consideration disrepair and damage, or upgrades and remodels unless these factors are listed in the public record.
How we approach home valuations
Using a proven approach, the right market data, and recent comparables (comps), Flyhomes evaluates homes for their true value, taking a number of other factors into account to get the most accurate estimate possible. These factors include the availability of multiple transactions rather than a single transaction, the most recent market data, ongoing market competition, and similarity in comp selections.
In addition to employing up to date AI and AVM technology, Flyhomes adds a human touch to ensure our price estimates are even more accurate. Our Research Team analyzes over 100 data points and all available documents and pictures to ensure you get a customized pricing report that will help guide you in the pricing and sale of your home.
Our pricing methodology is based on a standard process that relies on public documents and records, including tax records, listing history, listing pictures, pricing strategy, previously sold history, work permits, property pictures, etc.
Getting into the nitty gritty!
In order to understand Flyhomes’ accuracy level, we analyzed the 1,000+ reports of our pricing estimates between July 2022 and October 2022 for various residential property types in our active markets in Washington, California, Massachusetts, Colorado, Texas, and Oregon.
To understand how close we can get to the sale price of the home we used median absolute percentage error (MdAPE). Sounds scary, but stay with us!
This is a standard measure to test valuation models and is calculated based on the difference of actual sold prices to the price that we thought it was going to sell for.
To determine the MdAPE, the percentage error for each transaction is calculated by subtracting the predicted value from the actual value to calculate the difference between the predicted and actual value. This is then converted to the MdAPE by dividing the absolute error by the predicted value and multiplying by 100. Simply put, the lower this number is, the better. Still with us?
After running our calculations, we determined that our home valuations had an overall MdAPE of 3.8%, followed by popular big-box competitors that we compared against coming in at over 4%, and 5%.
What does this mean for you as a Flyhomes client?
While you shouldn’t price your home solely on an algorithm, they do give you and your Flyhomes Agent a better understanding of where your house stands in comparison to comparable properties in your neighborhood. And as a Flyhomes client, you’ll be rest assured that you have an edge on the competition with a very accurate home valuation.
Sell your home for maximum profit with Flyhomes
Not only does Flyhomes offer highly accurate home value estimates, but we also help you sell your home fast and maximize your profit. Our all inclusive listing services include:
- Getting your home show worthy with inspection, cleaning, and staging services
- Hosting open houses
- Taking professional photos
- Creating a virtual tour
- Marketing your home to buyers
We also leverage our active network of agents and buyers to get more eyes on your home and offers in your inbox. Plus, when you use our Buy Before You Sell service, your home is guaranteed to sell or we’ll buy it at no additional cost to you.
