The four-line formula behind every cash offer, a worked example with real numbers, and the three questions that test any buyer’s math.
Buyers base their cash offers on recent comparable sales in your neighborhood and work backward from the after-repair value. Offers typically land between 70 and 85% of ARV depending on condition, and you can always ask to see how the number was built.
A cash offer is built backward from what the house will sell for once it is fixed: what it sells for fully renovated (set by recent comparable sales on your block), minus the renovation to get it there, minus the buyer's costs to resell it, minus the buyer's profit for taking the risk. What is left is the offer. Every cash buyer in the country runs this same math — the only difference is whether they show you the breakdown or hide it inside a lowball.
We publish the buyer-side formula. How cash buyers price offers works the whole formula on a real set of numbers: a bungalow worth $150,000 fully renovated, minus $38,000 of renovation, minus $16,500 of resale costs, minus $20,500 of profit, lands at a $75,000 cash offer — with the comps, the repair scope, and every cost itemized on the page.
The rangeThe formula is fixed; the inputs move. A house needing a roof, a rewire, and a kitchen sits low in the range because the renovation line is large; a house needing paint and carpet sits high. Location moves the resale-cost line — a slower block means more months of taxes, insurance, and utilities while the renovated house waits for its buyer. That spread of inputs, not buyer generosity, is the whole distance between 70 and 85%. If you want a fast read on your own house before anyone visits, the cash offer estimator runs the same arithmetic.
Checking any buyerWhat did you use for the fixed-up value, and can I see those sales? Can I keep a copy of the repair list you priced? What happens to this offer if I get my own inspection first? A fair buyer hands you addresses, leaves the repair scope with you, and answers "nothing changes" to the third. A lowballer changes the subject on all three.
And remember the inputs are negotiable even when the formula is not: if you think a repair number is high, show a contractor bid and a fair buyer will rerun the math with you. The rest is facts you can check together.
More quick answersIf the property is a fit, you may get a written offer, typically within 24 hours: the comps, repairs, and costs behind the number. No fees, no obligation.
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