Key Requirements to be fulfilled for AVMs receiving the “EAA AVM Label”
The EAA’s goal is to establish consistent quality standards for AVMs across European jurisdictions. The AVMs within the EAA fulfil the highest technical requirements within the industry, set and fully adhered to by all EAA members. Compliance with these requirements is certified through a rigorous and transparent assessment procedure by the EAA AVM label, and continued adherence monitored on a regular basis.
An AVM is a system that provides an estimate of the Open Market Value of a specified property at a specified date, using mathematical modelling techniques in an automated manner without any human intervention post-initiation, making it an entirely objective and independent tool.
The following list includes a selection of some of the most relevant requirements and is not considered to be exhaustive.
- The AVM must be comparables-based, intended for residential properties
- The AVM must provide an estimated value for an individual property and a predictive measure of the estimated accuracy of each individual valuation
- The performance of the AVM must be meticulously tested (e.g. using an out-of-sample test), and clearly documented
- The EAA only considers reliable Surveyor Valuation or Sales Price as valid Benchmarking Values for performance testing, which of the two depending on the established market practice. Other data points, e.g. Asking Price, are explicitly rejected for this purpose.
- The AVM provider must produce and circulate regular performance reports
- The AVM must be commercially available and must have been utilised in the market
- The AVM can demonstrably outperform regional and national House Price Indices (HPIs)
- The AVM must be able to retrospectively value property over a sufficiently long period of time
- The AVM provider must subscribe to the EAA strategic targets as expressed in the EAA Mission Statement