When it comes to flipping houses, it’s easy to get caught up in the finishes—shiny quartz countertops, trendy light fixtures, and designer tile. But when an appraiser walks through your finished project, they’re looking at things a little differently.
Your After Repair Value (ARV) isn’t just about how nice the house feels—it’s about how it measures up to similar homes in the area, both in function and form. And since your appraisal directly impacts your financing, profits, and ability to scale, it’s worth understanding what appraisers really focus on.
Here are five things that can make or break your appraisal—and ultimately, your ARV.
1. Quality and Consistency of Renovation Work
Appraisers aren't contractors, but they can spot poor workmanship. They’re trained to notice when renovations are done well—and when corners have been cut. Uneven flooring, visible seams in drywall, or low-end finishes in a neighborhood of mid-tier homes can raise red flags.
Tip: Choose a clear quality tier for your renovation and stick with it throughout the property. Consistency helps support the value you’re aiming to prove.
2. Layout and Functional Improvements
It’s not just about what you replace—it’s about how the house functions after you’re done. Appraisers assign value to usable space. If you’ve opened up a cramped kitchen, added a bathroom, or turned a small bonus room into a fourth bedroom, you may see a bump in appraised value.
Tip: Make sure those changes are documented. If they required permits or structural work, include that info in your appraisal packet.
3. Comparable Sales (and How Your Project Measures Up)
This is where many investors get tripped up. Even if your renovation is flawless, there will be a limit to your ARV based on nearby comps. An appraiser’s job is to compare your property to others that recently sold nearby—and then adjust up or down based on features, square footage, and condition.
Tip: Before you commit to high-end finishes, check the comps. If no other home in a half-mile radius has a steam shower or imported tile, you may not see the return.
4. Permits and Code Compliance
Unpermitted work—especially on electrical, plumbing, or structural elements—can hurt your value. Even if the work is solid, appraisers may exclude it from the valuation or flag it as a risk.
Tip: Keep your permit records organized and ready to share. If you upgraded systems or made layout changes, have the documentation to back it up.
5. Curb Appeal and Exterior Condition
The exterior of your flip sets the tone for everything else. Appraisers take note of roof condition, siding, landscaping, and general exterior maintenance. A freshly renovated interior won’t make up for peeling paint or an overgrown lawn.
Tip: Invest a little in curb appeal—power washing, painting, and simple landscaping can go a long way in reinforcing the perceived value.
Bonus: Help the Appraiser Help You
Want to support a strong ARV? Put together a one-pager or folder with:
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A summary of your renovation scope
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Before/after photos
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A breakdown of material and labor costs
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Permits and certificates of completion
Making the appraiser’s job easier can help ensure nothing gets missed or undervalued.
Final Thoughts
Appraisals aren’t just paperwork—they’re a key part of your flip’s success. By understanding what appraisers really look for, you can make smarter renovation decisions and better protect your profit margin.
Looking for a lender that understands how to build ARV into your strategy from day one?
Let’s talk about your next project.
