Do you expect your agent to give you an ARV with every listing?

Question

My agent is sending me a lot of properties and I have no idea how to filter through them quickly. I don’t know what they’ll be worth after repair.

Should I expect my agent to give me approx values of all of these homes in good condition?

Kenneth Garrett · Answer

@John Moore

Become an expert in your particular market to confirm what the actual ARV is.  Do not rely on Zillow it is only a general number based on a number of criteria which may not be relative to your particular area.  Always conduct your own analysis.  I will ask my broker to send me a CMA, but I need to dissect the information.  Are the comps in the same neighborhood.  Crossing a major street into a different neighborhood can effect comps.  Same style of house, bedrooms, baths, square footages, school districts.  Try to stay within a half a mile no greater than a mile.

Always perform your own analysis.  It is no one else’s project but yours.  The only thing that matters are the numbers.  No emotion only numbers.

Good Luck.

Christopher Lombardi · Answer

John, Don't rely on your agents numbers.  Look at enough deals and comps in your market and you'll know the ARV better than your agent.   If you are putting your hard earned money at work, make sure you know its in the right spot and you're not relying on someone who has no skin in the deal.

John Moore · Answer

@Jonathan Dempsey

After reading all of these comments and thinking about how much money will be involved, I definitely do want to be able to know, on my own, what the ARV will be without having to rely on an agent.

Thank you for all of your advice! You sound like an excellent agent for your clients, I bet they're glad that you're conservative with the numbers.

Bjorik Mutize · Answer

Even right now i'd start building a list of comps in your criteria, analyzing them, then putting them on a spreadsheet or some kind of organized analysis so you can quickly reference.

The more you look at and underwrite properties in your criteria, the quickly you will be able to analyze and come up with profits and ARV. Also make sure your criteria is very specific.

Agents will give you supplemental information sometimes with the MLS listings however i would just do your research on your own. It will serve you better not only for this search but your searches down the line.

John Moore · Answer

@Christopher Lombardi

Thanks, for the quick reply! So do I ask my agent for comps all the time?

I guess this is why they say to pick a neighborhood or 2 instead of a large area, so that I can learn the prices better.

Michael T. · Answer

@John Moore I will provide an ARV for properties I think my buyers should highly consider and if there ready to buy.  If I just have them set up in the MLS to get an idea of what's on the market then I typically won't provide an ARV.

When they say let's start looking  and checking out properties then I'll start to provide ARV's.  At the same time here in Los Angeles the purchases are typically in the $750k - $1.2 million so it's well worth the time to make sure the ARV makes sense.

Christopher Lombardi · Answer

@John Moore Zillow just held a competition where they gave $1mm away to anyone who was able to make their Zestimate a more accurate. They say one team was able to put together an algorithm which made the Zestimate very accurate with only a 2.5% margin of error.    With that said, I use the Zestimate only as a quick overview of pricing but you really want to use the recently sold numbers on Zillow for exact numbers.

Kenneth Garrett · Answer

@John Moore

I spent my first year educating myself.  I studied markets analyzed hundreds of deals where I could tell flippers bought at a discounted rate and 6 months later the property was back on the market.  I studied and learned how to evaluate properties.  I calculated my own ARV’s and figured most likely what there profit was.  I attended numerous property tours of investors to listen how they purchased properties, what kind of rehab they conducted and there profit.  Attended local REIA meetings as another source and networked.  I was able to calculate the ARV pretty effectively by using; Redfin and Zillow as my sources.  When I found a property I wanted to make an offer on then I would ask my broker for a CMA.  I tried not to abuse there time.  You can learn so much by using your own research capabilities and so much Is available on line.

Good Luck.

John Moore · Answer

@Kenneth Garrett

Thanks. When you started out, did you ask your broker / agent to send you CMA’s for lots and lots of listings until you understood the market better? I understand what you mean about dissecting it yourself. I’m just curious when to ask for comps and when not to, because right now, for the most part, I don’t know if a property is listed at a good or bad price.

John Moore · Answer

@Bjorik Mutize

I have a spreadsheet of properties that I have looked at online but not comps. I've only driven by 1 of them so far.

I wasn't sure where to get comps because I don't want to work my agent to death with that while I'm looking at 100 different properties in the beginning, but now, after reading the above comments, I think zillow's recently sold would be a good place to start.

I'm not sure how specific to make my criteria yet because I don't know how much I can get financed for yet and I'm afraid if I make my geographical area too small, I won't get any deals in the next month or 2. I'm kind of waiting to hear about how much of a house she'll finance me for. She has mentioned it wil depend a little on the loan to value ratio. So I know I need to find some really good deals.

I understand that it will serve me better, and I think I know how to go about it now. I'll use zillow for intial analysis and ask my agent for more information and comps on only the properties that look like they might work.

Thanks for all of your advice, I really appreciate it.

Do you expect your agent to give you an ARV with every listing?

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