After-repair value is what a house would sell for once it is fully repaired and updated to match what buyers in the area expect, not what it would sell for today in its current condition. Cash buyers and contractors use it as the starting point for pricing a house that needs work, then subtract repair cost and a margin to land on an offer.
Why it matters
ARV is the number every offer on a house that needs work starts from, so knowing it lets you check the math behind the offer instead of taking the figure on faith.