How I actually calculate a cash offer — with the real math

The four numbers behind every offer

A cash offer is not a guess and it is not a favor. It is arithmetic: what the house will be worth fixed up, what it costs to get it there, what it costs to hold and resell it, and the margin that keeps the buyer in business. Any buyer who cannot walk you through those four numbers on the phone is either new or hiding something.

After-repair value: what the house sells for, fixed

We pull the same comparable sales a listing agent would — recent, nearby, similar size and age — and land on what the house would bring fully updated. This is the ceiling everything else subtracts from. Ask any buyer which comps they used; a real one will name addresses.

The repair budget, honestly priced

Roof, systems, kitchens, baths, flooring, paint — priced at contractor rates, not weekend-project rates, because a contractor is who actually does the work after closing. On this coast, add the items inland buyers forget: moisture, wind-rated windows, insurance-driven upgrades. This is usually where our number and a seller’s guess differ, so we itemize it on request.

Holding and resale costs nobody sees

From the day we close to the day we resell: property taxes, insurance on a vacant renovation, utilities, loan cost, then closing costs and often an agent commission on the way out. Months of carrying cost are real money — typically several percent of the value — and they come out of the offer, not out of thin air.

The margin, said out loud

We keep a margin for taking the risk — the surprise behind the drywall, the market cooling mid-renovation. That margin is why a cash offer is below retail, and any buyer who implies otherwise is selling you something. The honest framing: you are trading some price for speed, certainty, and zero repair risk. Sometimes that trade is smart. Sometimes it is not — and we will say so.

Offer versus your real net, not the list price

The fair comparison is never offer-versus-Zillow. It is cash-in-hand versus cash-in-hand: our offer with no commission, no repairs, and no months of carrying cost, against a projected sale price minus 5 to 6 percent commission, minus repair and prep spend, minus the mortgage payments, taxes, and insurance you carry while waiting, minus whatever the inspection negotiation takes. On a house that needs work, those columns land closer than most people expect. On a turnkey house, listing usually wins — and we tell people that.

Cover image — Photo: David E. Lucas, public domain, via Wikimedia Commons/DPLA.