Confidence Scores
What are Confidence Scores?
Confidence Scores show the accuracy of the model result, relative to the accuracy of an appraisal's forecast. The model's ability to provide actual Forecast Standard Deviation (FSD) of individual model results provides Home Value Explorer® (HVE) with a very effective measure of accuracy against true value that is a unique benefit of HVE.
When providing a valuation result on a property, HVE can provide Confidence Scores (H=high, M=medium, L=low) and FSD in the following ways:
- High – Confidence Score (H) corresponds to a FSD in use of < 13%.
- Medium – Confidence Score (M) corresponds to a FSD in use of > 13% to < 20%.
- Low – Confidence Score (L) corresponds to a FSD in use of > 20%.
The underlying FSD and Confidence Scores are regularly validated with out-of-sample testing. Over 70% of our HVE estimates are high confidence estimates. About 25% of HVE estimates are medium confidence estimates, and less than 5% of HVE estimates are low.