Determining how much is a house in the market for

3 Replies

I understand ARV but when it come to figuring how much is a house on the market for is using the tax appraisal website better than apps like Homesnap or Redfin? I pulled up the actual house I live in an all three sources gave me a different market values and idk which is accurate.

You need to pull up comps for homes that sold in the area recently that are similar to the house that you are looking to purchase.

@Gustavo Cuero , Welcome to BP!

Tax appraisals should not be used when calculating ARV.

Do not rely on automated valuations for quite a number of reasons, not the least of which that the valuation algorithms can't "see" inside pictures for the condition of the house. 

It's always best to find ARV for yourself, using recently sold properties, or comps, and adjusting those comps for features and amenities such as beds, baths, garages and pools. Find comps that:

  • have sold within the previous 3-6 months;
  • are within the neighborhood geographic boundaries;
  • have similar features;
  • are approximately the same square footage

Remember that the condition of the comps needs to reflect what the potential subject property will look like after rehab.

I wrote a biggerpockets blog post on how to find comps and calculate ARV which may be helpful:

https://www.biggerpockets.com/blogs/8814/68395-how-to-find-real-estate-comps-and-calculate-after-repair-value

Reach out if I can help with anything.

@Kuba F.

I get it, find 3-5 properties and add the price they are being sold for and get the average. That number will the highest dollar amount your deal will sell for. Then multiply by 70% and that number will be the most any investor will purchase that property for.

On your blog post "how to find comps and calculate ARV" you talk about assigning a dollar amount to every feature. My question is how do you find figures for every feature, is there a formula for that.