Practice briefing – Automated valuation models (AVMs): their role, their advantages and their limitations

Abstract

PurposeThe current state-of-the-art recognises three traditional valuation approaches. The current division is not sufficient to explain systematically all features that drive the development and usage of automated valuation models.Design/methodology/approachThis practice briefing reviews existing valuation approaches, their pros and cons and more critical other automated valuation aspects or features; both based on a literature review.FindingsThis paper discusses and lists the six critical aspects or features, besides the valuation approaches.Practical implicationsThis paper reveals the list of aspects or features that are important to consider when designing an automated valuation model.Originality/valueThis practice briefing discusses the inclusion of a multitude of aspects when considering an automated valuation model design.