What is the difference between ARV and market value?

Market value is what the property would sell for today, in its current condition. ARV is what it would sell for after renovation. For a house that needs nothing, the two converge; for a distressed house, the gap between them is the value a renovation creates.

Is the Zestimate an ARV?

No. Automated estimates model the property roughly as it sits, assuming typical condition — they cannot see renovation potential. Using a Zestimate as an ARV usually understates renovated value on a distressed house and badly overstates as-is value on a wreck.

How accurate does an ARV need to be?

Within about 5% is the working standard. On a $200,000 ARV, a 10% miss is $20,000 — bigger than most assignment fees and most flip profit margins. Precision here is not perfectionism; it is the whole ballgame.

Does ARV change over time?

Constantly — it moves with the comps. An ARV estimated in March is stale by September in a moving market. Re-run the comps any time a deal has been sitting, and date every ARV you write down.

ARV Explained: How to Calculate After-Repair Value

Ask any experienced flipper what kills deals and you’ll hear the same answer: a bad ARV going in. Repair surprises hurt, holding costs sting, but a wrong after-repair value poisons every other number silently, from the first offer to the final sale. Here’s how the number works and how to get it right.

Why ARV runs the whole deal

Watch how everything derives from it:

Your maximum offer comes from it — the 70% rule is literally ARV × 0.70 minus repairs.
The rehab budget is justified by it — you spend $40,000 only because the ARV says the market pays you back.
The flip’s profit is the ARV minus everything else.
The BRRRR refinance is sized from it — lenders lend a percentage of the post-renovation appraisal.
Your credibility rides on it — cash buyers re-run your ARV before they wire anything.

Get the ARV wrong by 10% and there’s no clever negotiating or budget discipline that gets the deal back. That’s why the analysis order is always: ARV first, repairs second, offer last.

How to calculate it

ARV is a comping exercise with one non-negotiable filter: renovated comps only.

Pull recent sales near the subject — within about half a mile, closed within 6 months, within 20% of the square footage, same property type and era. (The full method is in our guide to comping without MLS access.)
Sort by condition using the listing photos. Keep only the sales that look the way your property will look after the renovation — updated kitchen and baths, new flooring, fresh exterior. This sort is the step that makes it an ARV instead of a market value.
Compute price per square foot on the renovated set. It should cluster in a band.
Multiply your subject’s square footage by that band, then adjust for real differences — a missing garage, a smaller lot, one less bath.
Bracket the answer. One comp slightly better than your finished product, one slightly worse. Your ARV lives between them.

Example: renovated sales nearby closed at $142, $138, and $145 per square foot. Your 1,400 sqft subject supports roughly $193,000–$203,000 renovated. Call it $198,000 — and write down the three addresses that back it. Run your own numbers through the free ARV calculator to see how the bracket math plays out.

The mistakes that inflate ARVs

Comping to the ceiling. Using the one spectacular sale — the double lot, the addition, the builder’s own house — as your anchor. Your renovation makes the house typical-nice, not exceptional.
Borrowing comps from a better neighborhood. Value stops at boundaries buyers care about: school zones, major roads, subdivision lines. A quarter mile in the wrong direction can be worth $40,000.
Assuming a renovation level you didn’t budget. If your comps have quartz counters and your budget says paint and carpet, your comps don’t match your rehab. ARV and the rehab scope must describe the same finished house.
Stale comps in a shifting market. Sales from a year ago carry last year’s rates and last year’s demand.
Motivated math. Wanting the deal to work, so the ARV drifts up until it does. The market never cooperates with this.

How buyers will audit your ARV

Every serious cash buyer re-comps your deal in minutes, and they check three things: are the comps really renovated, are they really nearby, and are they really recent. This is also exactly what PropTitan’s valuation engine does on every property — it runs the comp set and produces both the as-is value and the ARV side by side, with the comps attached, so the number you market is the number a buyer’s own audit confirms. See the comps and ARV feature for the walkthrough.

An ARV that survives someone else’s audit is the asset. An ARV that only works in your own spreadsheet costs you the thing wholesalers can least afford: buyers who stop opening your deals.

One number, one discipline

Write the ARV down with its evidence — three comp addresses, their $/sqft, the date you ran them. Date it. Re-run it if the deal ages 60 days. And when the comps say a deal doesn’t work, believe the comps. There are more houses; there is no substitute for a number the market will actually pay.