Module 5: Comping & Valuation
Turn your comp data into a precise After Repair Value estimate
Add all adjusted comp values and divide by the number of comps
Best for:
When all your comps are similar quality and you have 5+ good comps
Give more weight to the most similar or recent comps
Best for:
When 1-2 comps are clearly superior matches to your subject property
Look at the high and low range, eliminate outliers, pick conservative estimate
Best for:
When comp values vary widely or market is uncertain
Subject Property: 3 bed / 2 bath, 1,500 SF, built 1995, needs full renovation
We found 5 comps and adjusted them. Here are the adjusted values:
Comp 1
$215,000
0.3 mi away
Sold 45 days ago
Comp 2
$222,000
0.5 mi away
Sold 30 days ago
Comp 3
$218,000
0.4 mi away
Sold 60 days ago
Comp 4
$205,000
0.8 mi away
Sold 90 days ago
Comp 5
$230,000
0.2 mi away
Sold 20 days ago
($215K + $222K + $218K + $205K + $230K) ÷ 5 = $218,000
Straightforward but treats all comps equally
Comp 5 is closest and most recent, so we give it 40% weight. Comp 2 gets 30%. Others get 10% each.
($230K × 40%) + ($222K × 30%) + ($215K × 10%) + ($218K × 10%) + ($205K × 10%)
= $92K + $66.6K + $21.5K + $21.8K + $20.5K = $222,400
More accurate by prioritizing best comps
Range: $205K (low) to $230K (high) = $25K spread
Comp 4 at $205K is an outlier (oldest sale, furthest away). Remove it.
New range: $215K to $230K. Take conservative position at lower-mid range.
$218,000 - $220,000
Most conservative approach
Based on all three methods, we'd choose: $220,000 ARV
This is conservative (below the weighted average) but supported by multiple comps. Safe for making an offer.
Always Be Conservative
When in doubt, go lower. Overestimating ARV is the #1 reason wholesalers lose money.
Prioritize Recent Comps
A comp from 30 days ago is worth more than one from 120 days ago, especially in changing markets.
Verify Comp Condition
Look at listing photos. Make sure "renovated" comps truly match the level of renovation you're planning.
Account for Market Trends
If the market is cooling, adjust downward. If heating up, you might go slightly higher.