Intelligent Valuation vs. Automated Valuation Models or AVMs
The Zillow® Zestimate® valuation is a widely-used automated property value estimate, popular for its convenience and accessibility. Many homeowners and buyers use it as a starting point for understanding property values. However, its reliance on algorithms and public data can lead to inaccuracies, especially when unique property attributes are involved.
What Could Be Missed by AVM
- Property condition such as recent repairs, deferred maintenance, or high-end finishes
- Quality of the home and location, including custom construction or prestigious school districts
- Location attributes like premium views, proximity to parks, water, or popular amenities
- Recent renovations and additions not yet recorded in public data
- Data errors in public records, such as incorrect square footage or bedroom count
- Private or off-market sales and seller concessions
- Market timing issues in rapidly appreciating or declining markets
Benefits of Intelligent Valuation
- Personalized review of property details, photos, and market data
- Adjustments for local market trends and neighborhood specifics
- Ability to identify and correct errors in data provided by public records
- Affordable option ($50–$300) providing reliable estimates without full appraisal costs
Use Cases
- PMI Adjustment: Not accepted by lenders for PMI removal, but excellent for pre-qualification or self-assessment
- Loan Officer Tasks: Useful for initial loan sizing, pre-approvals, and risk screening
- Underwriter Tasks: Not suitable for final underwriting, but helpful for early-stage review
- Estate Planning: Useful for informal planning or family discussions, but not for IRS filings
- Homeowner Knowledge: Ideal for ROI analysis on remodeling or pre-listing strategy
- Real Estate Agents and Others: Supports pricing decisions and negotiations
Intelligent Valuation stands out over Automated Valuation Models by providing tailored, up-to-date, and context-aware estimates. The best reasons to choose this new, alternative valuation type include its ability to factor in real property condition, renovations, and unique location features, things Zestimate values may miss; such as a case where a home with a new $50,000 kitchen remodel is inaccurately valued because the upgrade isn’t in public data. This makes Intelligent Valuation ideal for homeowners considering application to drop PMI or preparing to renovate or sell, or investors seeking accurate acquisition values, and anyone needing a reliable pre-listing or pre-renovation assessment.
A low-cost Intelligent Valuation will result in a more accurate and actionable value.
Zillow® and Zestimate® are trademarks of Zillow, Inc.
