Rehab ARV Estimate
I'm really hoping there is a simple answer for this.
In Greater Phoenix, there are three levels of comps: Traditional Sales, REO's and Preforeclosures (Short Sales). Here are average comps in dollars/sq.ft (active listings and sold) based on each one:
For Active Listings
Traditional Sales - $228 (accounts for 46% of all active listings)
REOs - $92 (accounts for 13% of all active listings)
Short Sales - $94 (accounts for 41% of all sales)
For Sold Properties
Traditional Sales - $115 (accounts for 31% of all sales)
REOs - $70 (accounts for 49% of all sales)
Short Sales - $88 (accounts for 20% of all sales)
Notice that REO's only make up 13% of active listings, but account for 49% of sold properties.
I would assume in most cases the REO's and Short Sales require paint and carpet and traditional sales are in better condition. Again this is an assumption.
For those doing active rehabs, how would you base your ARV comps on? The REO's since they are nearly half the market? Traditional sales because those would more closely resemble a fixed up house? An average of the two?
If you need more info before you can answer, let me know. Thanks for the input.