This is the question most people actually want answered before they’ll even consider a cash sale, and honestly, a lot of “we buy houses” sites avoid answering it directly. Here’s a straightforward explanation of how offers are calculated, and how to think about whether it’s a good deal for your situation.
The Honest Answer: It’s Usually Below Full Market Value
Cash buyers do not typically pay full retail market price — the price your house might get after being fully renovated and listed on the open market. That’s not a trick; it’s the tradeoff for everything you’re not paying for or dealing with: no repairs, no realtor commissions (typically 5-6%), no closing costs, no months of showings, and no risk of a deal falling through due to financing or inspection issues.
The Basic Formula Most Legitimate Buyers Use
Estimated After-Repair Value (ARV) — what the house would sell for once fully fixed up
minus Estimated Repair Costs — what it would actually cost to get it there
minus holding costs and selling costs – the cost to hold the property, close it on the purchase side, and close it on the selling side
minus the Buyer’s Required Profit Margin — the return the investor needs to make the deal worth doing
= Cash Offer
Why the Math Can Still Work Out in Your Favor
It’s easy to look at that number next to an “estimate” on a site like Zillow and feel like you’re leaving money on the table. But the honest comparison isn’t cash offer vs. full market value — it’s cash offer vs. **net proceeds** from a traditional sale, after real costs you will pay. If you sell on the mls with a realtor you will be on the hook to pay:
- Realtor commissions (typically 5-6% of sale price)
- Any repairs a buyer’s inspection turns up, which you’ll likely need to fix or credit
- Closing costs (often 1-3% or more)
- Months of mortgage/insurance/tax payments while the house sits on the market
- The risk of a deal falling through after financing or inspection
For a house that needs real work, or where you value certainty and speed, those savings often close much of the gap — sometimes all of it.
See the full comparison: Selling House For Cash vs Listing with a Realtor.
Questions to Ask to Make Sure You’re Getting a Fair Offer
- Can you explain how you arrived at this number?
- What repair costs are you factoring in, specifically?
- Are you willing to walk me through comparable sales in my neighborhood?
A cash buyer who can answer these clearly and specifically (not vaguely) is a good sign. Vague or evasive answers are a red flag — see our related piece on Spotting cash buyer scams in Cleveland.
Get a Real, Explained Offer — No Guesswork
We’ll walk you through exactly how we arrived at your offer, based on your specific property and comparable sales in your neighborhood — not a generic formula pulled from an algorithm. Get your cash offer or call/text (216) 877-8430.
