Start here: this article is part of our fix-and-flip collection. For the full picture, read our complete guide, Sell As-Is or Fix It Up First? A Homeowner's Guide to Selling a House That Needs Work.
Accurate ARV calculation is essential for profitable investing. Learn the methods professionals use to determine after-repair value, common mistakes to avoid, and how to adjust for market conditions and property specifics...
Accurate ARV calculation is essential for profitable investing.
Frequently asked questions
How do cash buyers decide what to offer?
We start from after-repair value based on recent comparable sales, subtract the cost to bring the property to market condition, subtract holding and transaction costs, and leave a margin. That's why offers on well-maintained homes come in closer to retail than offers on properties needing major work — the repair number is doing most of the work.
Why is an online estimate different from a real offer?
Automated estimates use public records and past sales, so they can't see a new kitchen, a failing foundation, or a shared driveway. They also carry a published margin of error that widens in neighborhoods with few recent sales. Treat them as a starting range and get a real underwritten number before making a decision.
Should I get an appraisal before selling?
Usually not necessary for a direct sale, since our own underwriting produces the number. A pre-listing appraisal can help when a property is unusual, when heirs or a court need an independent figure, or when you're documenting value for tax purposes. The FHFA House Price Index is a useful free check on how your market has moved.
How do investors calculate a maximum offer on a flip?
The common shorthand is after-repair value multiplied by roughly 70%, minus the repair budget — the spread covers financing, holding costs, closing costs on both ends, and profit. The two inputs that break deals are an optimistic ARV and a repair estimate built from a walkthrough rather than contractor bids.
Sources & further reading
Primary sources we consulted for this article. Rules vary by state and change over time — always confirm against the original source.
- 1House Price Index
Federal Housing Finance Agency
Quarterly, government-published home-price movement by state and metro area.
- 2Appraisals and home valuations
Consumer Financial Protection Bureau
How lenders value a property and what happens when an appraisal comes in low.
- 3Housing statistics and existing-home sales
National Association of Realtors
Industry benchmarks for days on market, sale-to-list ratios, and buyer behavior.
About the author
Sarah Williams
Senior Real Estate Analyst
Sarah Williams works with the SilverCrest Estates acquisitions team, helping homeowners across 50+ US markets understand their options and close on their own timeline.
Disclaimer: This article is for general information only and is not legal, tax, or financial advice. Real estate rules vary by state and change over time. Consult a licensed attorney, tax professional, or financial advisor about your specific situation before acting.
