What does 70-80% of ARV mean?
So here’s an example of an actual eXp CLOSED transaction: Property listed in the MLS at $300,000 - After Repair Value (ARV) of the property (once totally rehabbed and pristine) is $415,000 - this also represents the top sold comparable in the neighborhood. Generally speaking, the iBuyer offer would be approximately $290,000 which is 70% of After Repair Value (AFV). There is only a $10K gap between the offer price and list price. This example would be a great candidate for an iBuyer Offer and a SOLD transaction. THIS S A GENERALIZATION AND BASED ON ONE SPECIFIC IBUYER MODEL.
In 102, Terri shares a formula to calculate whether a property would be a good fit for a fix & flip iBuyer. That equation was based on an actual closed transaction.
However, some of you have experienced offers lower than what you expected based on that calculation. Here is another way you should consider the math to arrive at a RANGE. I think this may help level the expectations when submitting to a fix and flippers. Remember, every investor will use a slightly different strategy when making offers.
What does After Repair Value (ARV) mean?
The After Repair Value (ARV) estimates the future value of a distressed property after it's been repaired or improved. ARV is commonly used by fix and flip investors who purchase, renovate, and sell properties within one year. A property's after ...
Louisiana ExpressOffers Procedures
When you do a listing presentation with a seller and believe the house might be a prospect for an iBuyer, you will complete a normal listing agreement with the seller along with all documents required. You will then write an addendum to the listing ...
Will a Fix & Flip iBuyer pay close to fair market value?
No. Typically an iBuyer whose intention is to purchase the property, does a complete rehab and resell (Fix & Flip) will use a valuation model of 70 to 80% of After Repair Value (ARV) to base their offer price. Keep in mind that generally this type ...
Will a Buy & Hold iBuyer offer close to list price?
YES. Typically, Buy & Hold iBuyers will offer 90 to 95% of fair market value. This is generally speaking as each iBuyer will have different investment goals. Offer prices may vary and will also depend on the degree of cosmetic updating (i.e., paint ...
Is there a limit to the number of properties I can submit?
YES. Agents are encouraged to do their homework on the properties before they submit to the ExpressOffers software platform for consideration. You are allowed to submit 3 properties a day. These properties must fit the buy box exactly AND make sense ...