Yesterday Midwest Real Estate Data LLC (MRED, formerly MLSNI and better known as the MLS of Chicagoland) announced, in conjunction with Realist.com, that it had rolled out a new product entitled Realist ValueMap (RVM). It’s a automated valuation model (AVM) which is very similar to Zillow‘s Zestimates. According to their video introduction, the service will be available for brokerage and agent web sites shortly.
What Is A RVM Really?
MRED's Announcement of The Realist ValueMap (RVM) - Click to Enlarge
The system is available only to MRED members and members get to it though ConnectMLS. There is no additional charge for using the RVM; it’s part of REALTORS’® normal fees to MRED. To get to it, a REALTOR® logs into ConnectMLS, goes to the Search page, selects Taxes from the Search Type pulldown menu, and then clicks on the Realist Tax Search link. We mention all this because it seems a convoluted way to get to it. And, the level of convoluted-ness doesn’t end there; the interface is not all that easy to use. Most people will have to play with it in order to find what they’re looking for.
You are able to search for a property in many different ways: address, phone number, owner’s name, to name a few. You are then presented with the property’s details from the various databases the system pulls information from. It’s a good list and is up-to-date as the data it pulls from. You’re also presented with a group of five buttons; the view you’re probably looking for is the Value Map button.
A map then pops up showing your target property along with five somewhat similar properties that are currently for sale and five somewhat similar properties that have recently sold. In the upper right corner, in bright blue, is an estimate of the value of the property. Below the map is a list of the ten properties that were used as comparables (comps).
It’s Not An Appraisal
MRED's Value Map - Click to Enlarge
In no way is the Realist ValuMap an appraisal of a property. In fact, they recommend using it for commercial properties, vacant land, and multi-family homes. They claim that because of their connection to the MLS, they are more accurate than any other web home valuation service.
It’s simply an automated system like Zillow, Trulia, etc. You have to be very skeptical of the accuracy of these valuations. Especially when there are so many factors involved in valuing a property.
- Curb Appeal The exterior of a property cannot be evaluated by these systems. The builders of the system would say that this is built into the prices of the comps, but if the target house has an amazing exterior, you will not be given a credit for this in the valuation. Computer systems cannot take this type of information into consideration.
- Functionality The only way to ascertain if a property is functionally obsolete is to actually walk through the property. Functional obsolescence is one reason why a home might drop in value. For example, the market value of a home that doesn’t have enough electrical power to run a dishwasher, microwave and hair dryer at the same time will steadily fall. Other than functional obsolescence, a property can also lose value due to poor maintenance or a slump in the economy.
- Site Value In the city of Chicago, land values vary by neighborhood. In some areas land values are as high as $500,000. These automated valuation models simply cannot adjust for site values accurately. They all but admit this when they say that you should not use RVM for vacant land.
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January 13, 2009 at 2:46 pm
I agree Katie – I love the disclaimer under the header: “Values on this page are modeled, please work with your agent for a precise value assessment.”
To take it one step further, this service is already provided on realtor.com’s homepage section titled “What’s your home worth?” This home value data is pulled from the MLS (specifically whatever MLS services the zip code provided by the consumer). Thus, this service is already provided on, arguably, the #1 real estate property search site in the nation.