Help with ARVs in still “hot” markets
My question is so simple, yet not! How should I be looking at comps for ARV? Do I use the list price or the sold price? In my market (northern New Jersey) the competition and demand is so fierce that sold price will easily be 100k over list. My agent always uses sold price as the comp, but what is the true value? When there is such a discrepancy b/t the two, I need to make sure I target the correct one. Thanks In advance for any feedback!
I would use the sold price but filter it to the last 45-90 days. The market has slightly improved since then so it should give you a conservative number.
I would recommend being more conservative and basing the ARV off of the list price as it's not wise to plan on getting over-asking price offers or multiple bids. However, there are plenty of situations in Northern NJ where properties are intentionally listed under market value in order to get those multiple-bid situations over the asking price...in those situations, the true value of the home is likely somewhere in between the listed and sold price, and a good agent should be able to gauge the true value range.
An appraiser would use the sold price, so you should too. Sure, there are anomalies which you should recognize, but list price means nothing to ARVs.
#3 General Landlording & Rental Properties Contributor
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#3 General Landlording & Rental Properties Contributor
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Quote from @Brittany Edwards chu:SOLD price , but do not even try to buy anything yet, you are not ready. Please connect with those doing deals , learn then apply what you learn
My question is so simple, yet not! How should I be looking at comps for ARV? Do I use the list price or the sold price? In my market (northern New Jersey) the competition and demand is so fierce that sold price will easily be 100k over list. My agent always uses sold price as the comp, but what is the true value? When there is such a discrepancy b/t the two, I need to make sure I target the correct one. Thanks In advance for any feedback!
All the best
#1 Market Trends & Data Contributor
Quote from @Brittany Edwards chu:
My question is so simple, yet not! How should I be looking at comps for ARV? Do I use the list price or the sold price? In my market (northern New Jersey) the competition and demand is so fierce that sold price will easily be 100k over list. My agent always uses sold price as the comp, but what is the true value? When there is such a discrepancy b/t the two, I need to make sure I target the correct one. Thanks In advance for any feedback!
sold price PSF. But from the statistical point of view, let's say there're 30 sold prices in last 3 months, then I plot it in excel with plot chart.
So if lowest.comp is $700 and highest comp is $1,000 on the same block, if I see PSF as $600 then I see an opportunity. I can also see if market is trending.
I see opportunity all the times this way.
#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
- Investor
- Austin, TX
I am using pendings and under contract listings, the market is changing so fast 3 month old comps may not even be accurate.
#1 Market Trends & Data Contributor
Quote from @Eliott Elias:
I am using pendings and under contract listings, the market is changing so fast 3 month old comps may not even be accurate.
can you know the 'agreed' price during pending/under contract ?
Quote from @Carlos Ptriawan:
Quote from @Eliott Elias:
I am using pendings and under contract listings, the market is changing so fast 3 month old comps may not even be accurate.
can you know the 'agreed' price during pending/under contract ?
It won't be listed, however if you are using a local agent they may be able to ask their collegues to give them a rough number or at least to know if they got ask. This will help give you the most current data.