What is an AVM?

An AVM is an Automated Valuation Model (a computer generated non-appraiser estimate of value based on general market information).

Isn't that as good an an appraisal?

No.  An AVM doesn't tell you more than it does.  Just to name a few, it won't tell you:

• if the subject property or the comparable properties are really there
• the condition of the subject or the comparable properties
• locational features that might add or detract from value (retail, parks, schools)
• neighborhood appeal (school districts, flood zones, traffic)
• circumstances of the sale (sold under duress, inter-family sale, realtor owned)
• if the market is in upswing or decline
• Homeowner's associations - amenities & fees

But isn't it cheaper than an appraisal?

Only in the actual initital preparation costs. 

    For the homeowner:

• An AVM has no way to know the condition of the properties, therefor all properties are considered average.  If an AVM values a house 10+% lower than an appraisal with a physical inspection would, the borrower has less qualifying power.  He can borrow less money and/or pay a higher interest rate - costing thousands more in the long run. 

    For the lender:

• An AVM has no way to know the condition of the properties so there is no way to protect the lender from over-pricing a "fixer" - with a potential for loss in the tens of thousands in the case of default.

What qualifications, designations, experience and education does the preparer of the value has.

No one knows.  But it is probably not an appraiser.  When you work with an appraiser, you can be confident you're working with a highly qualified, ethical professional and with specific knowledge of your neighborhood and good judgment.  And if you're relying on an automated valuation, you're cheating yourself out of an appraiser's education, experience and expertise.