ARV (After Repair Value) is what a property will sell for once renovations are complete. You calculate it from recent sales of comparable, already-renovated homes nearby. The method, in short: pull three to six sold comps within about a mile and the last six months. Match them to your property on size and layout, adjust for differences, and apply their price per square foot to your square footage. ARV is always a projection of a future sale, so the quality of your comps is the quality of your ARV.
What ARV Is — and Is Not
ARV is not the current as-is value, and it is not a Zestimate. It is the resale value of your property after it has been brought to the same finished condition as the comps you are pulling. Because every downstream number — your maximum offer, your repair tolerance, your projected profit — is built on ARV, an error here multiplies through the entire deal. This is exactly why the MAO formula starts with ARV.
Step 1 — Pull the Right Comparable Sales
Good comps follow three rules: proximity, recency, and similarity. Stay within about a mile (closer in dense urban markets), use sales from the last six months, and match on the things buyers pay for — bedrooms, bathrooms, square footage within roughly 20%, and property type. Use sold comps, not active listings: closed sales show what buyers actually paid, while asking prices are only hopes. Appraize pulls these from real MLS data sources rather than web scrapes, which is the difference between a defensible number and a guess.
Step 2 — Adjust Comps for Differences
No two houses are identical, so you adjust. If a comp has a finished basement your subject lacks, subtract its value from that comp. If your subject has a two-car garage a comp does not, add for it. Common adjustments cover lot size, garage, basement, an extra bed or bath, and major condition gaps. The goal is to make each comp an apples-to-apples stand-in for your finished property.
Step 3 — Work Out Price Per Square Foot
Divide each adjusted sale price by the comp's square footage to get its price per square foot. Then weight the comps that match your subject most closely the heaviest. You are looking for the price per square foot a buyer would reasonably pay for your property in finished condition.
Step 4 — Apply It to Your Subject
Multiply your blended price per square foot by your subject's square footage. That product is your ARV. Sanity-check it against the raw sale prices of your closest comps — your ARV should land inside their range, not above the best of them.
Worked Example
Your subject is a 1,600-square-foot 3-bed, 2-bath that will be fully renovated. Three renovated comps sold in the last four months within a mile:
- Comp A: 1,550 sq ft, sold $312,000 — $201 per square foot.
- Comp B: 1,680 sq ft, sold $328,000 — $195 per square foot, but it has a finished basement your subject lacks. Adjust the sale down about $10,000 to $318,000, or $189 per square foot.
- Comp C: 1,600 sq ft, sold $322,000 — $201 per square foot, a near-twin of your subject.
The two closest matches (A and C) cluster near $201, and adjusted Comp B sits a little lower. Weighting the closest comps, you settle on about $199 per square foot. Applied to 1,600 square feet, your ARV is roughly $318,000 — comfortably inside the comp range, not above it.
Common ARV Mistakes
- Using active listings instead of sold comps and inheriting optimistic asking prices.
- Reaching outside the neighborhood or back more than six months because the nearby data was thin.
- Applying raw price per square foot across mismatched homes without adjusting.
- Picking the highest comp because it supports the deal you want to do.
Bottom Line
ARV is a discipline: real sold comps, honest adjustments, and a number that sits inside the range of what buyers actually paid. Appraize calculates ARV automatically from real MLS comps, confidence-scores the result, and feeds it straight into all 8 exit strategies — so the number that drives your whole deal is built the right way in under 30 seconds. Your first 3 analyses are free.
