Hey guys. Can anyone tell me how to determine the ARV on a rehab & Rent/sell? I don’t have a realtor that I’m working with yet. Do I use comps? If so, how can I get accurate comps without a Realtor? Thanx
You really need a realtor or an appraiser to get accurate info and comps…
What stevie-o said is true. But you need to get involved with how they give you the comps. I have access to the MLS service here and there are a lot of mistakes the agent can make. Make sure they get comps of house just like yours in the same neighborhood. Sometimes just crossing a street can make a significant difference in what comps you will get. I suggest you put an eye on each house used for the comp, or as I do it use Google earth. Also agents do comps all the time. The comps that they do 50 times a day or listing comps. That is what the property lists for. That is how they tell you what you should list a property for. You want sold comps. That is what these houses actually sold for. This is the number you want to use. Check that they accurately represent your property. If you have a 1500 sqft house make sure they are not running comps on 2000 sqft houses. You also want to check on the time frame they search. They can use comps from up to 2 years old. You need to make sure that the comps are current sales. I would not go older that sales in the last 60 days.
Exactly Bluemoon. I’m a mortgage broker and looking at appraisals all the time, so I know how to examine comps and figure out if they mean anything to my property. I should’ve mentioned that too.
another way is contact a local title company. in my area (So Calif), there is one company that even puts it on their website for FREE.
I use to be of the same thought process as Stevie-O (either have a realtor or appraiser determine ARV by way of comps), but at the risk of offending realtor sensibility, I’m not drinking their kool-aid anymore (long story that I’ll save for another day).
In this day of declining markets/property value, I’m an advocate of subject to assessment which only can be provided by a 203k inspector and/or qualified appraiser.
I’m a formula guy and I have one for calculating ARV as well—here it is:
Subject to appraisal value - 5 to 10% (to account for the declining market if this is the case) = ARV
Regards,
Scott Miller
Is there such thing as an estimate letter from a RE appraiser? I’ve read they write these up as a preliminary estimate that does’n’t cost as much as a full appraisal. Any one hear of this?