Emily Williams
Published: 06/27/2012
Posted by: RET Staff

With so many technologies available to real estate agents today, it's easy to feel overwhelmed by the terminology and the options. You can hardly determine which technology to choose, let alone how to use it once you've made your choice. Whenever you have these sorts of questions, your broker and your peers can be great resources. But so can we! That's why we're going to continue our trend of comparing product types and explaining different vendors for each. We started along these lines with our comparison of transaction management vs. document management, and today we'll continue with CMAs and AVMs.

Valuation Tools

CMAs and AVMs are both valuation tools. Let's look at each of them more closely to clearly understand the difference.

• Competitive Market Analysis (CMA). A CMA is generally used to aid in discussions about the value of an owner's property and the best potential list price. The key here is that the agent prepares the CMA, providing comparable recent sales and their own personal recommendation for listing price. The recommended listing price is based on the comparable homes and the agent's own insights.
• Automated Value Model (AVM). Already, you may have spotted the key differentiator between a CMA and an AVM – an AVM is automated, meaning that the agent's role in creating the AVM is passive. AVMs rely entirely on mathmatical models to produce an estimate of the value of a home, rather than adding an agent's insights. Many AVMs are available directly to consumers (Zillow's Zestimate is one example of a frequently-used consumer AVM).

Now, there's a lot of variation between the products within each of these categories as well. In order to better understand what they do, we talked to a few of the companies that specialize in this area.