What are these values Home Investor Tool (HIT) is promoting and what do they mean. This entry is one attempt to get to the bottom line of how HIT defines Top Of Market (ARV) and why it’s a big deal Not everyone wants the technical back story – turn back now or get some no Doze.
HIT’s ARV is what the property will appraise for if it is in excellent – call it “perfect” – condition. HIT also provides the middle of the market or “Market Average” and the verifiable bottom on the market or “Wholesale” value.
HIT uses Adjustment Grids or Grid Analysis to determine the core values After Repaired Value (ARV) –, MA –Market Average – and Whole Sale (WHSLE)
An Adjustment Grid or Grid Analysis is a list of values (Fields) that allows the analyst to systematically identify, analyze and rate the performance of relationships between these Fields. Appraisers use Adjustment Grids or Grid Analysis to evaluate property and is a core in the Decision Matrix for lenders and investors. The reason is that it simply produces a more reliable, predictive result. Period.
HIT’s defines ARV or After Repaired Value as Top Of the Market for a fixed up property of like kind. In a word, it is what the property will appraise for if it is in excellent – call it “perfect” – condition. It is based on the highest sold prices, which are bracketed for gross living area (GLA) and aligns with year built and the core amenities – lot size, garage spaces, bedrooms, baths and pools, design and construction quality. Proximity and closed date are the first lines of demarcation and we will reach out until we have at least 3 properties that align with the subject. HIT always has 6 comps before selecting the highest rated. Subdivision is given additional weight. Since this is the top of the market no adjustments are made for condition. The market will not pay top dollar for properties in less than excellent condition.
(This is an empirical result though may appear as an assumption)
HIT’s evaluation model is transparent; the values of the fields and the adjustments are clearly defined in the Adjustment Grid. HIT rates the comps as well. In all cases the value is the midpoint of the comps used adjusted values. HIT identifies relevant and quantifiable values and adjusting for slight differences. This analysis is not an extrapolation or estimate; it is calculation driven and is deemed to be reliable though not guaranteed.
To replicate this value assumes market forces remain persistent and demand and market confidence are consistent
HIT’s is agnostic– ARV is based on the parameters defined, manipulation of the fields and their values using industry standards.. If the User wants to test alternative comps the exclusive COMPALATOR™ is provided in the app for all Members. The User can change the adjustments as well.
HIT goes one step further by providing other evaluation models as well – Grid, CMA and AVM-Market Trends. HIT is not vested in any of the results – it is providing values and their methods and the User decides which of these best suit their needs.
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