The API submitted a formal response to the IVSC Tangible Assets Board in relation to the IVSC Perspectives Paper: Automated Valuation Models and Residential Valuations.  A copy of the full API response to the IVSC Tangible Assets Board and the corresponding IVSC Perspectives Paper is available to read below. 

API Response to IVSC Tangible Assets Board

IVSC Perspectives Paper

The APIs conclusion in its response included the following; 

“The API agrees fully with the summary contained within the Conclusion section of the paper, namely; 

‘a fully automated Residential AVM with no valuer interaction is not IVS compliant for the following reasons: 

  • there is no valuer involvement in either the creation of the model or the output; 
  • it does not include the valuer’s professional judgement noting that a valuation is defined in IVS as “the act or process of determining an opinion or conclusion of value of an asset at a specific date in compliance with IVS”; and 
  • a Residential AVM is unable to provide an opinion of value.’ 

The API notes that the perspectives paper also contains discussions of several other reasons that support the conclusion that a fully automated Residential AVM is not IVS compliant. 

The API acknowledges that AVMs have been around for many years in one form, or another, and with improvements in the accuracy of data and modelling their use and acceptance by consumers of valuation products is likely to increase.  The API believes it is therefore important for the IVSC to provide clear guidance on what an AVM is and what it isn’t, as well as outlining the benefits and risks of these products so that the public is fully informed. 

It would also be beneficial for the IVSC to consider the development of a ‘standard’ that deals with the use of AVMs as in input or tool by valuers as part of their investigations and procedures when undertaking valuations.  This could also reinforce the requirements for an IVS compliant valuation.”   

We would like to thank the Members of the technical working group for their contributions, knowledge and insights which formed the basis of our responses and comments. 

If there are any queries or comments in relation to any of the above, please contact the professional standards team at [email protected]