Edition 2020 Ninth edition

5.2.9. 
The valuer must also explain the input data and source, offering transparency to 
the client.
5.2.10. 
Most often, the valuer will use descriptive statistics such as: coefficient of co- 
variation, mean value, median, mode, standard error, standard deviation, range, 
minimum, maximum, number of samples.
5.2.10.1. 
Based on such comprehensive market analysis, the valuer may be able 
to derive key inputs which will be applied as a component of the valuer's 
EVS-compliant valuation process.
5.3. Models
5.3.1. 
As huge volumes of data about real estate become more readily available, a widen-
ing range of models based on statistical analysis becomes available on the market.
5.3.2. 
AVMs are one class of statistical model, often a combination of complex models 
producing a price estimate of a property at a specific date.
5.3.3. 
AVMs typically comprise the following standard components:
•
Input data;
•
The predictive model with the mathematical rules used to calculate the esti-
mated price (algorithm). This is no more than an automated mathematical cal-
culation, and not an exercise in valuation judgment;
•
The outputs of the model (price estimates).
5.3.4. 
AVMs use large scale of data from various sources. In order to use data as selected 
by the AVM, the valuer must know:
•
The scope of the data source used by the AVM (regional, national, all transacted 
properties, only mortgaged properties …);
•
The type of data (sale prices, asking prices, valuation results);
•
The volume and homogeneity of data under investigation;
•
How regularly the source of information is updated;
•
The criteria applied by the AVM provider for the inclusion or exclusion of data.

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and then consider its relevance to the property.
5.3.5. 
Valuers must understand the predictive model used and assess their confidence in 
it and in its strengths and deficiencies as a representation of the market.
5.3.6. 
When valuers consider information supplied by a third party, they must be sure 
that it is credible enough to be relied on. As valuers have sole responsibility for 
the valuation opinion, they must decide if they can rely on any of the data provided 
by the AVM.
5.3.7. 
When valuing the property, valuers can only use the output from the AVM as one 
possible element in their consideration of indications of value.

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V.  
Measurement, 
Education and 
Qualifications

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European Valuation Standards 2020
V. Measurement, Education and Qualifications
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European Code of Measurement