It can be puzzling to see an already renovated home flagged as a deal in your search results. Privy’s deal-finding algorithm is designed to streamline your search by eliminating irrelevant listings and highlighting properties with investment potential. This guide explains why these homes appear and how to interpret the results effectively.
Understanding Privy’s Deal-Finding Algorithm
Privy’s algorithm eliminates 90%+ of listings that lack supporting data to qualify as potential deals.
It compares the asking price of a property to the price of its comparables.
If the margin between these prices meets or exceeds the margin set in your deal-finding filter, the property is flagged as a possible deal and appears in your search results.
Example: How the Algorithm Works
If your search filter is set to 75% ARV:
A house listed for $115,000 would have a Minimum Price Threshold of $153,333 (calculated as $115,000 / 0.75).
If comparables for this house exceed $153,333, it is flagged as a possible deal and included in your results.
Note: If a property appears that you cannot add value to, you can hide it from your search results.
Why Comps May Be Higher Than Your Renovated Home
Qualitative Value: A comparable property might have features like a river view, proximity to a park, or oceanside location.
Major Roads: Properties on busy roads can have lower ARVs by 10% or more.
Additional Features: Comps may have extra bedrooms, bathrooms, or newer construction.
Renovation Quality: The renovation may have been poorly done or not built to the neighborhood’s standards.
Market Standards: Higher-end flips in the area may drive up the price of comps.
How to Handle These Situations
Use Privy’s tools to refine your search and hide properties that don’t meet your criteria.
Look at qualitative factors and comps that better align with your property’s features.