ARV is the estimated market value of a property after all planned renovations are complete and the property is in sellable condition. It's not current value, assessed value, or Zillow's estimate — it's what comparable renovated properties have actually sold for recently.
Use MLS closed sales only. Filter: same property type, within 0.5 miles (1 mile rural), sold in last 90 days, similar square footage (±15%), same school district. Look for comps in updated/renovated condition. Adjust for bed/bath differences, garage, lot size.
No two comps are identical. Adjust for differences: each bedroom ±$10k–$20k depending on market, garage ±$15k–$25k, square footage ±$50–$100/sqft, lot size varies. Weight your most similar comps most heavily.
Using listings instead of closed sales. Using comps more than 90 days old in a moving market. Ignoring school district lines. Comparing different property styles. Assuming your renovation matches the highest comp when scope doesn't support it.
Your ARV estimate and a formal appraisal can differ by 5–15%. Lenders use appraised value for financing purposes. Build in a buffer — if your ARV is $350k, underwrite to $325k–$335k to account for appraisal variance.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been calculating ARV on deals across Northern Virginia for over 20 years.