What is an AVM appraisal?
In recent years, a new electronic appraisal process has gained in popularity, especially with larger financial institutions. Known as AVMs or Automated Valuation Models, they are a type of software that can give a lender an estimated value range on a property just by having the lender key in some basic information about the property, most of which can easily be found in the local multiple listing service. These AVM data bases contain information which is derived from MLS and is used in situations where the borrower is putting a substantial down payment on the property and the overall credit profile and loan package is such that default is mitigated by those factors. That is actually the primary reason a lender has an appraisal performed, anyway; to determine if the market value of the property is adequate to collateralize the mortgage. Most borrowers dont actually understand this concept. While the home buyer may want to be assured that the property is worth what they are paying for it
