An automated efficiency model (AEM) is a mathematical model that estimates a real estate property’s efficiency (in terms of energy, commuting, etc) by using details specific to the property which are available publicly and/or housing characteristics which are aggregated over a given area such as a zip code. AEMs have some similarities to an automated valuation model (AVM) in terms of concept, advantages and disadvantages.
AEMs calculate specific efficiencies such as location, water, energy or solar efficiency. The Council of Multiple Listing Services defines an AEM as, “any algorithm or scoring model that estimates the [efficiency] of a home without an on-site inspection. They are similar to Automated Valuation Models (AVMs), but are more reliant on public data such as square footage...and estimated energy usage.[1]”
Most AEMs calculate a property’s selected efficiency by analyzing available public information and may also apply proprietary data or formulas, and allow for a user such as a home owner to make additional inputs. Housing characteristics such as age of the home or square footage may be obtained by data providers such as those on this list of online real estate databases or a similar offerings. Estimates of energy usage may be available from published sources such as through the Residential Energy Consumption Survey by the Energy Information Administration.