Estimating ARV without waiting on an agent

What ARV has to survive

Your after-repair value is not a guess about what the house is worth. It is a prediction of what an appraiser will say when your buyer's lender orders an appraisal, or what a cash buyer's own analysis will conclude. If your ARV cannot survive that, the deal does not work no matter how good the entry price looked.

Pull the right comps

Sold, not listed. Within the last ninety days if the market is moving, six months at the outside. Within half a mile in a city, and inside the same school attendance zone wherever that matters locally. Same property type and roughly the same square footage - within fifteen per cent is a reasonable band. Three is a minimum; five is better.

Throw these away

Anything that sold to a related party or between family members. Anything that was on the market for a week at a price that looks wrong in both directions. Anything across a hard boundary - a highway, a river, a rail line - even if it is physically close, because buyers do not cross those. And any comp that is itself a flip that sold to an investor rather than a retail buyer.

Adjust for the obvious, ignore the rest

Adjust for bed and bath count, garage, finished basement and lot size, because those move money. Do not try to adjust for a nicer kitchen or a better paint colour, because you will overfit and talk yourself into the number you wanted. If two comps disagree by twenty per cent, you have the wrong two comps.

The three mistakes

Using the top comp as the ARV instead of the middle. Assuming your finish level will beat every comp when it will actually match them. And pricing the ARV for the market you want in six months rather than the one in front of you. All three feel like optimism at the time and look like arithmetic errors afterwards.

Photographs lie about condition, not about layout

Listing photos are staged, shot wide and taken at the best hour of the day, so they overstate condition every time. What they do tell you reliably is layout: where the walls are, whether the kitchen is closed off, whether the third bedroom is really a bedroom or a converted porch. Use the photos for the floor plan and use the comps for the money.

Check what a comp sold as, not only what it sold for

A house that sold for $210,000 after a full renovation is a comp for your finished product. That same house selling at $118,000 as a distressed sale eight months earlier is a comp for your entry price. Both are useful and they answer different questions. Mixing the two is the most common way a spread disappears on paper before it ever disappears in real life.

When to pay for an opinion

In a market you know, your own comps are enough. On a first deal in a new city, spend a couple of hundred dollars on a broker price opinion or an appraisal before you go hard. It is the cheapest insurance in this business, and it is the step people skip precisely because they have already decided they like the deal.