Zestimate vs. Actual ARV — Where Are Investors Getting Burned?
Specialist · Member since 2026 · 22 posts · 7 votes
Zestimate vs. Actual ARV — Where Are Investors Getting Burned?
2 Replies
- 2moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votesI couldn't agree more. I've seen plenty of deals where the Zestimate looked great until you actually dug into the comps. One thing that always makes me slow down is when the highest sales nearby were full gut renovations while the subject property only needs light cosmetic work, or vice versa. If the finish level doesn't match, the ARV can be way off. I also like looking at days on market and price reductions because they can tell you whether buyers are actually paying those numbers or if the market has shifted since those sales happened. Spending an extra hour validating the ARV is a lot cheaper than finding out after closing that your exit price was too optimistic. Happy to connect and answer any questions you have!
Quote from @Olayinka Oyewole:
I see this mistake constantly when reviewing deals: someone pulls a Zillow Zestimate, calls it the ARV, and builds their whole offer around it.
A Zestimate is an automated estimate with no idea what condition the comps sold in, whether they were renovated, or how recent the sale actually was relative to today's market. An actual ARV means pulling comps sold within the last few months, adjusting for condition and finish level, and confirming they're truly comparable (same bed/bath count, similar square footage, same sub-market).
The gap between the two isn't small — and it's usually the difference between a deal that works and one that quietly eats your margin.
Curious if others have a story where a bad ARV almost got you into a bad deal — what tipped you off before it was too late?
Jimmy Lieu, Red 1 Realty4.9121 Reviews- Specialist · Member since 2026 · 22 posts · 7 votes2mo
Quote from @Jimmy Lieu:
I couldn't agree more. I've seen plenty of deals where the Zestimate looked great until you actually dug into the comps. One thing that always makes me slow down is when the highest sales nearby were full gut renovations while the subject property only needs light cosmetic work, or vice versa. If the finish level doesn't match, the ARV can be way off. I also like looking at days on market and price reductions because they can tell you whether buyers are actually paying those numbers or if the market has shifted since those sales happened. Spending an extra hour validating the ARV is a lot cheaper than finding out after closing that your exit price was too optimistic. Happy to connect and answer any questions you have!Quote from @Olayinka Oyewole:
I see this mistake constantly when reviewing deals: someone pulls a Zillow Zestimate, calls it the ARV, and builds their whole offer around it.
A Zestimate is an automated estimate with no idea what condition the comps sold in, whether they were renovated, or how recent the sale actually was relative to today's market. An actual ARV means pulling comps sold within the last few months, adjusting for condition and finish level, and confirming they're truly comparable (same bed/bath count, similar square footage, same sub-market).
The gap between the two isn't small — and it's usually the difference between a deal that works and one that quietly eats your margin.
Curious if others have a story where a bad ARV almost got you into a bad deal — what tipped you off before it was too late?
Appreciate you flagging that, Jimmy — the finish-level mismatch on comps is honestly one of the sneakier ARV traps, since two "comparable" sales can tell completely different stories depending on what was actually done inside. I've started weighting comps by rehab scope specifically for that reason, not just proximity and square footage. Since you're in Columbus — that's one of the markets I actively research — always good to connect with people who know it at ground level.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.