Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
I've seen a couple threads over the past week where the OP has questioned how to find comps and estimate ARV. Marty Boardman and I discussed this topic a bit at the BP Summit last month, and I also put together a quick primer that I distributed to those who attended our Summit presentation.
This 10-page document certainly isn't an "everything you need to know about doing appraisals and estimating resale value," but should be enough to teach anyone the basics of estimating ARV.
If the comp sold for $150,000 we would subtract 7,000 because the subject property is older and add 5,000 because the subject property is larger, leaving us with a total adjustment of -2,000.
Based on this very limited example, the subject property would have an ARV of $148,000.
Guys, I'm sorry to say that this seems a bit confusing. What is the ratio to price for each year difference that a comp property has? Same goes for Sw footage. How do we look at these properties and draw the number (seemingly out of midair) to make sense ?
The specific ratios and adjustments are going to be location-specific. The best recommendation is to talk to some local real estate agents, get access to the MLS or find a few appraisals that you can use as a gauge.