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 repair value includes both its purchase price and the value of its renovations although sometimes not dollar for dollar.
Agents will need to do their homework to determine what is the top price a property can capture in the neighborhood AFTER it’s been renovated and is in pristine condition. This will be your benchmark for some quick math based on the "Formula" in the buy box to evaluate properties BEFORE submitting to an iBuyer for consideration. This will also allow you to set the correct expectations for your seller based on receiving what will most likely be a discounted offer.
During the submission process, agents should upload at least 3 sold comparables to support their opinion of ARV. You should indicate the estimated asking price if the seller has conveyed that information as well as your opinion of as-is value. Some of our investors do not have 1st hand neighborhood knowledge as you do, so your chances of a solid offer increases as you provide them with supporting documentation as to your opinions of value.
ARV (after repair value) estimates the potential value of a property after all repairs have been made.
After repair value is used by wholesalers, fix-and-flip investors, and property owners to determine the potential profit on renovations and updating.
Conducting a comparative market analysis and accurately estimating the cost of repairs are two key parts of accurately determining ARV.
Many investors use the 70% Rule with ARV to determine the maximum purchase price of a home that needs to be renovated.
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 ...
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 ...
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 ...
I'm not clear on the compensation model when working with ExpressOffers. Who Pays ME?
The iBuyer does NOT pay us in the initial transaction from Seller to iBuyer! Any compensation earned in an ExpressOffers transaction will be from the Seller via listing agreement between eXp Realty and the Seller or via the co-op commission offered ...
What are the competitive advantages of the ExpressOffers program in uncertain times?
Our ExpressOffers program has some advantages over other iBuying platforms in uncertain times: We have multiple iBuyers with different company sizes, territories and investment strategies (Buy & Hold, Fix & Flip and Land purchases). So, even if some ...