How Are You Confident In Your ARV Estimate?

Question

So I'm a newbie. Wondering how you seasoned pros get confident on an ARV? Do you rely on comps from your agent? Actually order a BPO? Use your gut?

Kuba F. · Answer

@Asim Alam the trick is with picking the right comps in the first place, most recently sold, same neighborhood, similar features, etc.  You get any of those wrong and bad data in means bad data out.

You may never be entirely confident though.  Get 5 appraisers and you might get 5 different numbers...

Nick C. · Answer

It takes practice, like anything else. Comps thousands of houses and you will get really good at it.

Richard Wormwood · Answer

@Kuba F. That was actually the problem on my first deal. The comps were all over the place since the area had seen a number of investors recently. One house in particular completely skewed my numbers by over 20% and nearly cost me the deal.Having a seasoned agent to pull comps or to help you pull comps is the key to getting a confident ARV but just expect to get it wrong occasionally. Even investors that have done 100's of deals will blow their comps from time to time.

Asim Alam · Answer

Thanks! Oh man, you first deal!

Yeah, I've been making the comps tables and comparing features, but I guess there is no substitute for a seasoned agent on your team.

Richard Wormwood · Answer

Considering how BADLY I screwed the ARV on my very first deal; I researched this immensely and determined that the only way to get a confident ARV, is either from a seasoned agent or a detailed amount of research with one or more MLS Comps programs.I don't want to refer a name due to the back and forth experiences I have had with a couple of them. But after mastering the learning curve, there are some good ones out there.

How Are You Confident In Your ARV Estimate?

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