Appraising the ARV

Lenders base their loans on the After Repair Value, and rely on appraisals for the ARV. Appraisers use the As-Is value, and the value of the work / improvements to be done, to calculate the ARV. The work to be done is provided by the borrower in the Repair Estimator / Rehab List / Scope Of Work (line items should include labor and materials).

Add notes, call out, and provide drawings for;

• Square footage being added.

• Bedrooms being added.

• Bathrooms being added.

• Change in use.

• Any significant changes which will result in added value.

The appraiser does not know what the borrower / investor is planning to do, and since the appraiser cannot value what they don’t know about, the more detail the better to ensure an appraisal for the highest ARV.