Its based on some fancy algorithm and obviously doesnt take into consideration the interior of the home..  

The combo to remove the lock box is in reality a simple algorithm from the combination to open the lock box but the tenants do not know the algorithm.We allow one lock out a year without charge. 

I like Zillow because, even though their Market Estimate is probably less accurate than the EPA Mileage Estimates, like the EPA Mileage Estimates, it uses the same algorithm throughout.

I go on all these county assessor sites and they all make me confirm that I am not using an algorithm to mine the data off their records.

I dont think anyone outside of the engineers know much about how the algorithm for that works.

The companies who are moving large volume of stocks have computers trading of an algorithm.

I started taking an active interest in learning to evaluate ROI and cash flow, and creating my own exotic spreadsheets and algorithms laying out my own personal strategies. 

I won’t get into too many details here, but the reality is hedge funds spend millions per year buying algorithms that exploit a market inefficiency that only exists for a couple of weeks and then it’s gone.

It can be based on the ARV like you're thinking, actual LTV (as-is), or some other algorithm(s) specific to a lender's risk tolerance, experience, knowledge, etc.

I disagree with Nancy, there are a number of reasons an owner would sell at a price that meets your algorithm.