As well as this some look at previous surveyor valuations, historical house price movements and statistical models such as multiple regression analysis or geographic information systems (GIS). Appraisers, Wall Street and Lending Institutions all use AVM technology in their analysis of residential property.

An AVM is a residential Valuation Report that can be obtained in a matter of seconds. It is a technology driven report. The product of an automated valuation technology analysis, public record data, and computer decision logic combined to provide a logical calculated estimate of a probable selling price of a residential property. An AVM generally uses a combination of two types of evaluation, the running of a hedonic model and a repeat sales index. The results of each are weighed, analyzed and then reported as a final estimate of value based on a requested reasoning date. AVM technology reports are delivered over the Internet via any standard web browser.

An AVM typically includes:

• An indicative market value for many residential properties nationwide.
• The Tax assessor's indication of value, if available.
• Information on a subject property and recent sales history.
• Comparable Sales analysis of like properties.

AVMs are increasingly used by mortgage lenders to determine what a property might be worth in order for them to lend against the valuation and have also gained favor in class action litigation, and have been substantiated in numerous cases, both in Federal and state courts, as the appropriate method for dealing with large-scale real estate litigation problems, such as contaminated neighborhoods.

The advantages of using AVMs over traditional chartered surveyors are that they save time, money and resources (e.g. there are no transport requirements, which benefits the environment) and gives more valuation choices to lenders. It is claimed that unlike traditional surveyor valuations, AVM outputs do not suffer from the same fraud risk as the human interaction of the traditional valuation services might allow. AVMs are particularly useful in assessing the value of portfolios of property.

The disadvantages are that they do not take into account the property condition, as a physical inspection of the property does not occur and therefore the valuation produced assumes an average condition which may not reflect reality. Purchasers relying on an AVM backed mortgage application will need to get separate advice to establish the true condition of the property. New build property is particularly difficult to value due to the lack of comparable properties and historic data, however an advantage of AVMs is that they pull on a larger pool of comparables and as such are not prone to incorporating the claimed 'new-build premium', although it would rely on comparables from physical inspections to achieve this. While AVMs can be quite accurate, particularly when used in a very homogeneous area, there is also evidence that AVMs are not accurate in other instances such as when they are used in rural areas, or when the appraised property does not conform well to the neighborhood. Other data sources used are sometimes misleading due to concealed incentives in recorded sales prices.

AVMs also do not not work particularly well on properties where the available view is a large factor in the property's value, such as ocean, lake, or canyon views. Real estate appraisal, property valuation or land valuation is the practice of developing an opinion of the value of real property, usually its current market value. The need for appraisals arises from the heterogeneous nature of property as an investment class: no two properties are identical, and all properties differ from each other in their location - which is the most important determinant of their value. So there cannot exist a centralized setting for the trading of property assets, as there exists for trade in corporate stock. The absence of a market-based pricing mechanism determines the need for an expert appraisal/valuation of real estate/property.

A real estate appraisal is performed by a licensed or certified appraiser (in many countries known as a property valuer or land valuer).. If the appraiser's opinion is based on Market Value, then it must also be based on the Highest and Best Use (HBU) of the parcel and real property. For mortgage valuations of improved residential property, the appraisal is most often reported on a standardized form, such as the Uniform Residential Appraisal Report (URAR). Appraisals of more complex property (e.g. -- income producing, raw land) are usually reported in a narrative appraisal report. An appraisal is a professional appraiser's opinion of value. The preparation of an appraisal involves research into appropriate market areas; the assembly and analysis of information pertinent to a property; and the knowledge, experience, and professional judgment of the appraiser. .

Appraisals may be required for any type of property, including single-family homes, apartment buildings and condominiums, office buildings, shopping centers, industrial sites, and farms. The reasons for performing a real property appraisal are just as varied. They are usually required whenever real property is sold, mortgaged, taxed, insured, or developed. For example, appraisals are prepared for: 

• Mortgage lending purposes,
• Tax assessments and appeals of assessments,
• Negotiation between buyers and sellers,
• Government acquisition of private property for public use,
• Business mergers or dissolutions,
• Lease negotiations

All states require appraisers to be state licensed or certified in order to provide appraisals to federally regulated lenders. Some states require appraisers to be licensed or certified to provide appraisals for other parties as well. To become licensed or certified, you must pass an examination that is administered by your state's appraisal board. The Appraiser Qualifications Board (AQB) of The Appraisal Foundation is authorized by Congress to establish the minimum requirements for all levels of licensure for appraisers. The role of the appraiser is to provide objective, impartial, and unbiased opinions about the value of real property thereby providing assistance to those who own, manage, sell, invest in, and/or lend money on the security of real estate. Appraisers assemble a series of facts, statistics, and other information regarding specific properties, analyze this data, and develop opinions of value.

Each appraisal assignment challenges the appraiser's ability to put analytical skills into practice, exercise sound judgment, and communicate effectively.