Glossary
ARV confidence
ARV confidence is a measure of how much you can trust an ARV estimate. It is high when several close, recent, similar comps agree, and low when there are few comps or their adjusted prices are far apart.
Two deals can show the same ARV and carry very different risk. One is backed by five renovated sales on the same street. The other leans on two sales a mile and a half away from last year. Confidence tells you which is which.
How it works in Run The Deal
The score starts at 100 and loses points for each weakness in the comp set:
- Fewer than 5 comps: 15 points for each one missing.
- Spread of adjusted prices: points once the spread passes 5%.
- Each comp with gross adjustments over 25%: 10 points.
- Median distance over 1 mile: 10 points. Median sale age over 180 days: 10 points.
- Your house is bigger or smaller than every comp: 10 points.
- ARV above the highest renovated sale nearby: 15 points.
80 and up is high, 60 to 79 is medium, 40 to 59 is low. Under 40 fails the verdict check, so the deal cannot be called good until the comps improve.
- Starting score
- 100
- 4 comps (one short of 5)
- -15
- Median distance 1.3 miles
- -10
- One comp with 28% gross adjustments
- -10
- Adjusted price spread 4% (under 5%)
- 0
What to do when confidence is low
- Widen the search a little in time or distance, then replace the weakest comps.
- Drop comps that need heavy adjustments rather than stacking guesses.
- Price the deal off the low end of the ARV range and check the ARV cushion.
- Walk the comps or ask a local agent before you commit real money.
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