Q & A Saturday – How Do You Find The ARV?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “How Do You Find The ARV?

 ARV - After Repair Value - Real Estate Investing

In this video Shaun discusses what the After Repair Value (ARV) of a house is and how to find this number.

 

Some of the main points covered in this video are:

1)      What is ARV?

2)      The Comparable Sales Method of finding it

3)      What are the most important factors to consider

4)      How old can they be?

5)      How far away can they be?

 

Finding the ARV (After Repair Value) of a house you are looking to fix and resell is the most important number you will need to figure out in evaluating a potential opportunity.  This is important for any rehabber doing a project, for any Wholesaler looking to sell deals to a rehabber, any real estate agent looking to work with investors as well as agents working with retail buyers and sellers as well.  The retail agents need to be able to tell sellers what value they can add if they do work vs. selling as a “fixer upper” and for buyers they need to let them know if it is worth buying a place that needs work and if the discount they are getting is big enough to not put them underwater after paying for the work.

To find the ARV we find the “comps” which are recent sales of similar properties in the same area.  The most important things to start to narrow down things are first make sure they are in the same city or town (If you live near the town line do not use ones in the other town), next make sure they are close to the house you are evaluating (Always try to keep it within half mile but closer is better) and finally they need to be recent (within 6 months but again the more recent the better).  Once you have this narrowed down try to find places with the same number of bedrooms and bathrooms and then as close as possible in the square footage (best to be within 10% but can go up to +/- 20%).  Other factors can go into it as well but these are the big ones.  Once you have a list you can adjust the prices if there are differences.  But you are now wondering “How do I find these comps?”, that is a big question.  The easiest way is if you have access to your local MLS service.  This is very easy to use if you can get onto it.  If you are not an agent or are not working closely with one that can help you do this you need to find other sources.  You can use things like Zillow, Trulia, Redfin etc. but it is a little harder and make sure you do NOT use the value estimates given like Zillow’s Zestimate which are terrible (See our Video on how bad those are).  Once you have 3-5 good comps then you can make a good estimate of the final ARV for a place!

 

Do you want to sell a house that is a fixer upper?  Do you need to sell a house in Massachusetts or New Hampshire and don’t want to do the work to get that ARV?  If you would like to sell your home fast and hassle free schedule a consultation with us today.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

Some useful resources:

–          Our Main Article on Selling a Home As Is.

–          All of our Articles and Videos on Selling a Home As Is.

–          Our Video on how Inaccurate Zestimates Are.

–          If you want to sell a house that needs fixing in Massachusetts or in New Hampshire we can help.

 

 

 

 

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