In the fast-moving world of real estate, the clock is your biggest competition. Whether you're buying your first home or closing on a high-stakes investment property, delays in financing can mean losing out on a golden opportunity. Understanding how to make an offer on a house that stands out isn’t just about price—it's about speed, reliability, and execution. That’s where hard money loans come into play, offering a game-changing edge for serious buyers and investors.

So how can you be sure your lender is giving you a reliable ARV? And more importantly, what can you do if it doesn’t line up with your contractor’s estimates or your market research?

Further reading: How to Incorporate Bridge Loans into the BRRR Method; How to Calculate ARV: a Simple Step-by-Step Explanation

Why the Accuracy of ARV Matters

The After-Repair Value is a projection of what a property will be worth after renovations are complete. It directly impacts:

Loan amount
Investment risk
Profit margins
Exit strategy

Overinflated ARVs: Potential Downsides for Borrowers

An overinflated ARV might seem attractive at first. It can allow you to borrow more, creating the illusion of better financing. But if the market doesn’t support that value after renovations, you could end up with:

An underwater property
Trouble refinancing
Difficulty selling
Loss of investor confidence

Undervalued ARVs: Missed Opportunities

On the flip side, an undervalued ARV limits your borrowing power, forcing you to inject more personal capital or pass on otherwise solid deals. If your contractor’s scope of work supports a higher post-rehab value, you deserve to have that reflected in the financing structure.

When ARVs Don’t Match: Lender vs. Contractor Estimates

What happens when your lender’s appraisal doesn’t line up with your contractor’s numbers?

This is more common than most investors think—and it’s often the result of differences in local market expertise, renovation scope interpretation, or outdated comp analysis.

For example:

Your contractor may be using modern design trends that significantly increase value.
The lender may be relying on recent comps that don’t match the property’s projected finish level.
External factors like upcoming neighborhood developments or school rezoning could shift value, and not all lenders are tuned in.

When this mismatch occurs, your deal can stall—or worse, collapse.

How to Negotiate With a Mortgage Lender Over ARV Discrepancies

If you find yourself in a situation where the lender’s ARV is off base, don’t panic. Here’s how to negotiate with a mortgage lender effectively:

1. Come Prepared With Data

Provide a detailed scope of work with contractor bids, projected material finishes, and before-and-after visuals. Include a comp analysis of recently sold properties that closely mirror your expected final product.

2. Highlight Local Market Trends

If your lender is using a national or regional appraiser, they may miss micro-market shifts. Use local MLS data or neighborhood reports to demonstrate rising values, demand shifts, or development activity.

3. Ask for a Second Opinion

If the appraisal feels way off, request a second opinion or the use of a different appraiser familiar with the area. A good lender will want to ensure their data is accurate too—it protects them as much as it protects you.

4. Leverage Relationships

This is where experience and trust come into play. If you’ve worked with your lender before and have a successful track record, use that rapport to argue your case. If you're a new borrower, be professional but assertive with your documentation.

5. Know When to Walk Away

Sometimes, a lender simply won’t budge. In that case, be prepared to walk. Not every deal is worth compromising your numbers or your risk tolerance.

Tips to Ensure You’re Getting the Right ARV from the Start

While you can certainly fight for a better ARV after the fact, prevention is always better than correction. Here are a few proactive steps:

Work with lenders who are experienced in your market.
Avoid cookie-cutter ARV calculators—make sure the lender uses human insight.
Understand your renovation scope in detail and have comps ready.
Choose appraisers who know your neighborhood intimately.
Be realistic with your numbers and don't aim for best-case scenarios only.

Choose a Lender Who Understands Your Market: Why Capstone is the Right Choice

Ultimately, your success as a real estate investor hinges on working with lending partners who not only understand ARVs but also know your market inside and out. The most accurate ARV comes from lenders who do their homework—and listen to yours.

That’s where Capstone Capital Partners comes in.

As a family-owned business with over 100 years of combined experience and more than $500 million in loans closed, Capstone has earned a reputation for providing investors with spot-on ARVs. Our team doesn’t rely on generic formulas—we dig deep with micro-local research, understand the nuances of every Texas neighborhood we lend in, and we’ve built long-standing relationships with appraisers, contractors, and agents.

Most of our clients are repeat borrowers who value accuracy, transparency, and the ability to negotiate from a position of knowledge and trust. When you work with Capstone, you’re not just getting financing—you’re getting a strategic partner who lives and breathes Texas real estate.

Ready to partner with Capstone? Tell us a little bit about yourself and we’ll get in touch with you!

Is Your Lender Giving an Accurate After-Repair-Value?