AVM-generated home values offer a quick estimate, but accuracy isn’t guaranteed—especially for unique or upgraded properties. That’s why AVMs should be combined with expert market insights like local comps, active listings, and agent input. Cross-checking AVM estimates with real-time data empowers buyers and sellers to make smarter decisions, avoid mispricing, and stay ahead in today’s competitive market.
What Is an AVM and Why Should You Double-Check It?
An Automated Valuation Model (AVM) is a technology-driven tool that uses algorithms, recent sales data, tax assessments, and other public records to estimate a property’s market value.
Pros:
- Quick and easy
- Free to access
- Good starting point for research
Cons:
- Often lacks nuance for renovated, unique, or under-marketed properties
- Doesn’t account for real-time demand shifts
- Can vary across platforms (e.g., Zillow vs. Realtor.com)
Example:
An AVM might value a 3-bed home at $350,000. But if that home recently added a designer kitchen and a finished basement—local sales data might show similar homes selling for $400,000+.
Step-by-Step: How to Cross-Check AVM Estimates With Local Market Data
1. Check Comparable Sales (aka “Comps”)
Look for recent sales of homes that are:
- Within a 1-mile radius
- Sold in the last 3–6 months
- Have similar size, age, condition, and layout
Pro Tip: Use filters on Redfin, Zillow, or Realtor.com to isolate comps by:
- Square footage (±10%)
- Bedrooms and bathrooms
- Lot size
Mini Case Example:
If your AVM shows $420,000, but 3 local comps closed at $460,000, $455,000, and $462,000—it’s a signal the AVM may be undervaluing your property.
2. Review Active Listings and Pending Sales
Don’t just look backward—see what’s happening now:
- Active listings show asking prices
- Pending listings hint at real-time buyer activity
Check for:
- Price per square foot trends
- How fast homes are going under contract
- Common price reductions
Use this formula:
Your Home’s Sq. Ft. x Local Avg. Price/Sq. Ft. = Estimated Market Value
Bonus Tool: Try Zillow’s price per square foot calculator to compare local rates.
3. Talk to Local Real Estate Agents
Agents live and breathe the local market. They can:
- Spot neighborhood trends AVMs miss
- Adjust for intangibles like school zones, curb appeal, or location premium
- Provide Broker Price Opinions (BPOs)
Who to ask:
- A listing agent with recent sales in your zip code
- A buyer’s agent who knows how homes are performing in your price range
Pro Action: Schedule a free comparative market analysis (CMA) with a local agent.
4. Leverage County and MLS Data
Public records can give clarity beyond what an AVM pulls:
- Property tax assessments
- Previous sale prices
- Renovation permits (that may justify a higher value)
Use your county assessor’s website or request MLS market trend reports from a professional.
Example Comparison:
Data Source |
Home Value Estimate |
| AVM (Zillow) | $375,000 |
| MLS Comp Avg | $395,000 |
| Tax Assessed | $360,000 |
| Recent Renovated Comp | $410,000 |
You now have a value range to work with—and context to question the AVM.
Bonus: Spot When an AVM Might Be Off
AVMs can be off by 5–20% or more in the following situations:
- Homes with recent upgrades or additions
- Properties in low-turnover or rural areas
- Unique architecture or custom layouts
- Hot or cooling markets where data lags behind real-time shifts
Key Takeaways: Be the Smartest Person in the Room
Here’s your expert playbook in a nutshell:
- Don’t rely solely on an AVM—use it as a starting point
- Pull comps and study price per square foot
- Factor in pending sales and market activity
- Talk to local professionals for insights AVMs miss
- Use tools and calculators to build your own estimate
Knowing how to challenge and validate AVM-generated home values gives you the upper hand—whether you’re setting a listing price, making an offer, or investing in your next flip.
Ready to take action? Use a market comparison tool or schedule a CMA with a real estate pro near you. Because in today’s market, the best-informed buyer or seller always wins.
