It’s the question every seller wants answered and most cash-buyer websites dodge: how much will you actually get? Here’s a straight, no-spin explanation of how cash offers are figured — so you can tell a fair one from a lowball.
Cash offers start from after-repair value, not today’s value
A cash buyer looks at what your house would be worth fixed up and sold on the open market — the after-repair value, or ARV — based on recent comparable sales in your area. From that number, they subtract the cost of the repairs the house needs, the costs of buying, holding, and reselling it, and a reasonable profit margin for taking on the risk and the work. What’s left is the offer.
A simple way to think about it
Roughly: ARV minus repairs, minus the buyer’s costs and margin, equals your cash offer. A house that needs little work gets an offer much closer to market value; a house that needs a lot gets a lower one, because someone has to pay for all that work. That’s not a trick — it’s just where the money goes.
What this means for you
A cash offer is generally below full retail, and any honest buyer will tell you that up front. What you’re buying with that difference is speed, certainty, and zero cost or effort on your end — no repairs, no commissions (which alone run 5–6%), no holding costs, no showings, and no risk of a financed buyer falling through. For a house that needs work or a seller who needs to move, that trade is often well worth it.
How to make sure your offer is fair
Ask the buyer to walk you through their numbers — the ARV they used, the comps behind it, and the repairs they’re estimating. A legitimate local buyer will happily show their work. If someone won’t explain how they got to the number, that’s your signal.
I’m always open about exactly how I reach an offer. Get a no-obligation cash offer, call/text (502) 414-8334, or read how I buy houses.