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Automated Valuations (AVMs)

Real Estate Advisory

What is an automated valuation and how is it carried out?

Automated valuation is the valuation of property that uses statistical and mathematical techniques, i.e., hedonic or econometric models, comparables-based models and AI. Typically, a combination of several of these models is used.

This method can only be applied when valuing widely traded homogeneous assets. Therefore, properties of special nature -that are thinly traded- are excluded.

The difference with a full appraisal lies mainly in the fact that it is carried out without the direct intervention of an appraiser. In other words, the usual checks carried out in an appraisal are not performed. However, the process of an automated valuation is supervised at all times by specialised technicians.

What databases make up the models?

Databases are essential in these valuation models. The larger, more accurate and cleaned up the database used, the better the result obtained.

Gesvalt’s positioning in this service is clear, since our databases collect the company’s know-how by adding all our current and historical appraisal values and comparables to the supply and actual transaction data.

What do we use automated valuations for and who are they intended for?

Although this technique can be applied when valuing properties on an individual basis, it is usually applied in bulk valuations of properties, in the form of portfolios.

In this way, we can value large amounts of properties in a very short time and with a high degree of reliability.

This type of service is mainly aimed at financial institutions, for the accounting management of credit risk required by the Bank of Spain, and also at investment funds in need of advice on the sale and purchase of assets.

Gesvalt offers its AVM service for mass portfolio appraisals by statistical methods, which are requested for the following purposes:

  • Provision of an estimate of the property’s sale and rental value.
  • Valuation of portfolios for acquisition and/or management purposes, as well as for regulatory purposes.
  • Portfolio evaluation and/or monitoring.
  • Construction of market indices.
Consultor Gesvalt
Carmen Millán
Real Estate Consultant
Portfolio Valuation Manager