What an automated valuation can do — and what it can't

An automated valuation — an AVM, Automated Valuation Model — estimates a property's market value computationally, without anyone visiting it. That is not sleight of hand but applied statistics: the model compares your property against a great many others whose prices are known, and infers what yours would likely achieve.

Two methods working together

The comparables-based method looks for the most similar properties in the most similar location: same property type, similar living area, similar year of construction. The tighter the match, the more reliable the result — and the harder it becomes in thinly populated areas where few comparable sales exist at all.

The hedonic method works differently. It decomposes price into its components and estimates what each individual attribute contributes — one square metre of living space, one year newer, a balcony, an address closer to the station. It then reassembles your property's value from those parts. The advantage: the model does not need a near-identical comparable, it learns the price effect of each attribute from the whole stock.

Modern models combine both and add machine learning that catches patterns a classical regression misses — for instance that an attribute behaves differently in prime locations than on the edge of town.

Why the range matters more than the number

Any serious automated valuation returns not just a value but a range and a quality measure. The range tells you how confident the model is. A narrow range means plenty of good comparables and a homogeneous market. A wide range means thin data, or a property that does not fit the pattern.

Reading only the middle number and ignoring the range mistakes an estimate for a fact.

What the model cannot see

An AVM knows your property only as well as the data it holds about it. It does not see:

• the actual state of repair — a renovated and a neglected house of the same age look identical to the model at first
• layout and floor plan, which determine how usable the living area really is
• encumbrances in the land register, rights of way, leasehold or listed-building status
• the view, the noise from the bypass, the neighbours

This is exactly why accuracy improves sharply as soon as you supply more than the address: living area, year built, year renovated, fit-out standard. Every additional reliable input narrows the range.

Not a statutory valuation

Important, and often skipped: an automated valuation is not a statutory market-value determination under § 194 of the German Building Code. For estate settlements, divorces, the tax office or a court you need a report from a qualified surveyor. The AVM figure is a market indication — excellent for sanity-checking a price expectation, preparing a sale decision or judging an offer. Not something to take to court.

Our advice: use the instant valuation to get a well-founded order of magnitude. When it gets serious, we come and look at what no model can see.