What is an Automated Valuation Model (AVM) primarily used for?

An Automated Valuation Model (AVM) is primarily used for valuing properties through the application of mathematical and statistical modeling techniques. AVMs analyze vast amounts of data, including property attributes, previous sales data, and market trends, to generate a property valuation. This approach allows for rapid and consistent appraisals, which are often leveraged by lenders, real estate professionals, and investors to assess property value without the need for a traditional on-site appraisal process.

While AVMs can indirectly support various activities such as assessing mortgage applications or estimating property insurance needs by providing property value estimates, their core function specifically revolves around valuation. Thus, the focus on mathematical modeling underscores the technology's primary purpose in real estate and mortgage operations.