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.
I walk through the same reasoning on video (watch it on my cash offer page), including why there has to be room in the deal for a cash buyer to close at all.
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.
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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.
The same math, with real numbers
Say a house would sell for $200,000 once it is fixed up, and it needs $35,000 of work — roof, kitchen, flooring, paint. Here is where that $200,000 goes before anyone makes a dollar:
| After-repair value — what it sells for, fixed up | $200,000 |
| Repairs | −$35,000 |
| Agent commission when it resells (5–6%) | −$11,000 |
| Closing costs, title, insurance, taxes and utilities while it is held | −$9,000 |
| Left before the buyer’s margin | $145,000 |
Two things are worth noticing. Repairs are the largest single line — which is why the same house in better shape gets a materially higher offer. And about $20,000 of that reduction is not profit at all: it is commission and carrying cost. Sell directly and those are costs you never pay, never manage, and never wait on.
An illustration, not a quote — your number depends on your house, the repairs it needs, and what comparable homes near you have actually sold for.
A county assessment is a different number with the same blind spot: it was built to divide up a tax bill, not to price a house. If that is the number you are working from, start here — what is my house worth?
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. If you are weighing whether any of this is legitimate to begin with, I answer that head-on here: is selling to a cash home buyer a scam?
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.
Two questions sellers usually ask me next: how fast can you actually sell a house for cash? and cash offer vs. listing with an agent.
If the number you are comparing against came from Zillow, read this first: will Zillow buy my house?