What Is RVM in Real Estate
Investing | Real Estate

What Is RVM in Real Estate?

Have you ever had difficulty producing accurate estimates on the valuation of a property?

If so, RVM may be what you need. RVM is an important tool for the modern real estate industry, and it can be highly beneficial for someone looking for a property in the market.

Let’s discuss it in some detail to give you a better understanding of what RVM is, why it is important, what are its benefits and how it is different from similar tools in the market.

RVM is short for the Realtors Valuation Model, an automated valuation model that was developed by the National Association of Realtors as a resource for realtors. It is an incredibly powerful and useful tool for realtors and real estate agents helping clients find or sell a home at the right price.

RVM gives estimated values of properties for realtors and agents to understand property performances in the market better. Most people, including realtors, may not know much about RVM or what it does. However, most people have heard of RPR.

Realtors property resource (RPR)

Close up of realtors accessing RPR on a mobile device

Realtors Property Resource (RPR) helps realtors and agents quickly gain access to detailed reports of properties so that their clients can make informed decisions. An RPR report of a property includes many important details like its location, dimensions, sales history, pricing history, and many other useful data points.

These data points are great for any buyer looking to compare homes, prices, and history of properties in the current market. RVM was developed to be used in the RPR as an Automated Valuation Model (AVM) that gives quick and accurate estimated values of properties.

Realtors and agents have access to the RVM of a property in its RPR report. It gives them an accurate, real-time estimated value of a property. The RVM uses public records, off-market data, and listing data from Multiple Listing Service (MLS) technology to derive its valuations.

These data sources allow the RVM to be more accurate than multiple automated valuation models (AVMs), which we will discuss ahead.

Multiple Listing Service (MLS)

MLS is the key for RVM to produce real-time, accurate estimated values of properties. MLS allows collaboration among brokers, and RVM can use this to its advantage. Any information shared on the MLS regarding a property makes it easier for RVM to derive a better, more accurate valuation for it.

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Importance of RVM in real estate

An accurate valuation via comparative market analysis is an integral part of any business deal, including real estate deals.

Selling homes is not easy, and whether you are a buyer or a seller, you only want to do business at the right price. Sellers ask for what they deserve against their property, and buyers never want to overpay for a property.

Hence, the RVM in real estate is so important. No one wants to close deals on properties with an inaccurate or unrealistic valuation. RVM’s ability to account for publicly available information, market dynamics, and listing data among other features, makes it a powerful and accurate valuation model.

RVM makes it quick, easy, and efficient to get the best estimated value, which would otherwise take a lot of time, money, and resources for individual realtors, agents, buyers, and sellers to obtain.

How RVM benefits everyone

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The main benefit of RVM in real estate is clear-accurate valuations of properties. Here is a list of how that benefits anyone involved in a real estate deal or the real estate industry as a whole.

Buyers

  • Helps buyers find affordable properties

Sellers

  • Helps sellers set the correct asking price/sales price for their property

Realtors and agents

  • Gives realtors and agents quick, detailed, and updated valuations based on real-time analysis
  • Allows realtors and agents to understand their markets better
Aerial photography of colorful town houses

AVM vs. RVM

AVM, or Automated Valuation Model, is one of the most popular valuation models used in real estate today. It uses proprietary algorithms to come up with estimates of property valuation. However, it lacks the sophistication of RVM.

AVM drawbacks

Unlike RVM, AVM does not use real-time statistics or on-market, off-market data from MLS.

It relies on comparing the values of similar properties at the same point in time. While they may be a better alternative to human appraisers, they still heavily rely on outdated and/or inaccurate data to generate valuations.

AVM example

You may have experienced consumer-ready automated valuation models like ‘Zestimate’ on Zillow. While these models are efficient, they are nowhere near the accuracy and real-time analysis of RVMs.

It becomes easier to understand the difference, considering an RVM is an AVM with better data and more powerful tools at its disposal. It is basically an upgraded AVM with greater accuracy.

Final thoughts

Realtors Valuation Model is simply the latest and newest valuation model in the world of real estate. It makes it far easier for people to close deals at the right pricing that accurately reflects the property value and its standing in the current market.

It has benefits for anyone involved in property deals and is especially beneficial to professionals like realtors and real estate agents, making RVM essential for a quick, more accurate sales price.

While AVMs are still the popular choice, a smart decision would be to use RVM because it gives far more accurate and relevant valuations than an AVM can. Its sophisticated algorithms, real-time analysis, and overall superior performance make it your best option.