One of the biggest questions sellers have about cash buyers is: how much will I actually get? Here’s a transparent breakdown of how cash buyer offers are calculated — and why the trade-off often makes sense.
The Honest Math
Cash buyers don’t pay retail. Here’s why — and what the numbers typically look like:
- After-Repair Value (ARV): What your home would sell for in fully renovated condition. Let’s say $380,000.
- Minus repair costs: What it costs us to fix it up. Let’s say $40,000.
- Minus holding/transaction costs: Property taxes, insurance, utilities, title, closing costs during our renovation period. Typically 5–8% of ARV. ~$23,000.
- Minus our profit margin: We’re a business. Typically 8–12% of ARV. ~$35,000.
- Our cash offer: $380,000 – $40,000 – $23,000 – $35,000 = ~$282,000
Compare That to a Traditional Sale
A traditional sale at $380,000 with a realtor involves: 6% commission ($22,800), closing costs (1–2%, ~$6,500), repair costs to list ($20,000+), and 60–90 days of carrying costs. Net proceeds: often $320,000–$340,000 — but that assumes the $40,000 in repairs were done first and no sale fell through.
The Trade You’re Making
You’re trading some money for certainty, speed, and zero effort. Whether that trade makes sense depends on your situation. Call us and we’ll give you an honest offer so you can make your own decision. (877) 800-3187