The Challenge
Manual property appraisals took 5–7 days and cost $400 or more per property — a significant bottleneck for the startup's mortgage origination pipeline. Each appraisal required a licensed appraiser to physically visit the property, compare recent sales manually, and produce a written report. At the volume the startup was targeting, the traditional appraisal process was an existential constraint.
Our Approach
Tequity built an Automated Valuation Model (AVM) using a gradient-boosted ensemble trained on a multi-year dataset of property sales, tax records, and listing history. The model incorporates location features (school districts, transit access, neighborhood comps), structural attributes (size, age, bedroom/bath count, lot size), macroeconomic signals (interest rate environment, local price trends), and satellite imagery analysis for condition and exterior quality assessment.
The AVM is served via a low-latency API that returns a valuation, a confidence interval, and the top contributing factors — all in under 30 seconds. For properties with low confidence scores, the system flags for hybrid review rather than providing a potentially unreliable estimate.
The Results
The AVM achieves median valuation accuracy within 3% of final sale price across the test portfolio — meeting the regulatory threshold for appraisal waiver programs. Valuation turnaround dropped from 5–7 days to under 30 seconds for most properties. The system now values over 100,000 properties per month, enabling the startup to scale origination volume without proportional growth in appraisal costs.
