Broker AVMs: Windfall or Hot Air?
An NAR policy change requires MLSs to deliver data feeds to brokerages
for AVMs. But some fear unintended consequences from this access.
BPOs, CMAs, USPAP: Real estate valuation is an alphabet soup of acronyms, easy to ignore until you
need solid numbers to support a transaction. However, a change to how one major
valuation product is created and sold
could forever shift the way brokerages
and multiple listing services operate.
AVMs, or automatic valuation models,
have been around for decades. Zillow
brought the AVM to the public, forcing
real estate professionals across the
country to contend with the company’s
But there’s another behind-the-scenes
world where AVMs using MLS data can be
sources of significant revenue streams.
These AVMs don’t appear on public
websites; instead, they work in the back
room, helping banks evaluate real estate
portfolios or determine refinancing calculations. Even Fannie Mae and Freddie
Mac have relied on AVMs to analyze the
The banks are willing to pay for access
to valuations based on MLS data. But
who owns the data? And who should
profit from it? In January, The Realty
Alliance, a group of larger brokerages
from across the country, sent a letter to
the National Association of REALTORS®’
MLS Technology and Emerging Issues
Advisory Board insisting that brokers get
a slice of the AVM pie. They said existing
policy permits participants to use MLS
data to create AVMs but noted some
MLSs refused to distribute data so it
could be used in this way.
Jon Coile, CRB, CEO of Berkshire
Hathaway Affiliate Champion Realty
Inc., based in Severna Park, Md., has
helped lead the push for greater MLS
cooperation. As a member of The Realty
Alliance’s board, he told NAR’s Multiple
Listings Issues & Policies Committee in
May it was well past time that brokers
get the tools necessary to compete with
Zillow and other third-party websites.
“They’re eating our lunch,” Coile said.
“We’re all in this together, and we need to
circle the wagons.”
NAR’s Board of Directors subse-
quently approved a proposal to require
MLSs to provide listing data in a way that
makes the development of fully auto-
mated valuation models possible.
Some industry watchers say NAR
moved too quickly. Minneapolis-based
real estate consultant and attorney Brian
Larson says The Realty Alliance’s request
was “reasonable” but fears unintended
consequences of the wider policy change.
“We’re making a policy change that
shifts the way MLSs do business,” Larson
says. The Realty Alliance is above board,
he says, and it’s working with reputable
technology company Collateral Analytics,
based in Honolulu. “My concern is not
about them; it’s about the people who
come after them. Will every such provider
Who’s Playing the AVM Game?
Collateral Analytics is hardly the first to
forge such data-sharing relationships.
CoreLogic has a program allowing MLSs
to license their data to the company in
exchange for royalties and branded valuation tools. There are more than a dozen
other companies operating in this space.
The REALTORS Property Resource®
has also gotten into the AVM business. In
addition to the data it provides to members, RPR also sells valuation models to
Are broker AVMs a good idea?
(Total votes as of July 1: 223)
29% No. AVMs are inaccurate and devalue our services.
15% Yes. It’s about time brokers profit from this data as third-party sites do.
12% It’s up to the brokerages to make that call for their local markets.
44% What’s a broker AVM?
Source: REALTOR® Magazine Poll Results