When you ask a cash buyer for an offer on your house, the number comes from a fairly simple formula. Knowing it helps you compare offers, spot lowballs, and decide whether a cash sale or a listing is better for you.
Step 1: What the house would sell for fixed up
Buyers start with what the house would likely sell for after it's repaired and updated, based on recent sales of similar homes nearby. This is often called the after-repair value. In Northwest Indiana that can swing a lot from street to street, so it should be based on real local sales, not a website estimate.
Step 2: Subtract the repairs
Next comes the cost to bring the house up to that level: roof, furnace, electrical, plumbing, flooring, kitchen, baths, cleanout. With over 20 years in construction, we price repairs like a contractor would, not with a guess.
Step 3: Subtract the costs to buy, hold, and resell
Closing costs, property taxes, insurance, and utilities during the work, plus the commissions and costs to resell. These usually add up to a meaningful chunk of the price.
Step 4: Subtract a margin
The buyer takes the risk of hidden problems and a changing market, and needs to make a profit to stay in business. That margin should be reasonable, and a fair buyer will tell you roughly what it is.
A worked example
These are round, made-up numbers to show the math. Your house will be different.
- Value fixed up: $200,000
- Repairs (roof, furnace, kitchen, flooring): − $35,000
- Buying, holding, and resale costs: − $24,000
- Buyer's margin and risk: − $26,000
- Cash offer: about $115,000, with no repairs, commissions, or closing costs for you
Now compare listing that same house. If you paid for the $35,000 in repairs yourself, waited a few months, and paid about 6 percent in commissions plus your own closing and holding costs, you might walk away with roughly $140,000 to $150,000. That's more money, but you need the cash for repairs, the time to manage them, and a buyer whose loan goes through. Listing it as-is, without repairs, usually lands much closer to the cash number, and many buyers' lenders won't approve a house in rough shape. That's the real trade-off: more money with more time, cost, and risk, or a sure number and a date you pick.
How to tell if a cash offer is fair
- They show you the math. The value, the repairs, and the costs, not just a number.
- It's in writing and closes through a licensed title company.
- You pay no fees. A real buyer never asks you for money.
- The price holds. Watch for a high offer that gets cut right before closing for vague reasons.
- They're local. Someone who actually walks through the house and buys in your area.
What makes an offer go up or down
Condition and location matter most. The size of the repair list, whether the house is vacant or has tenants, open liens or back taxes, and how quickly you need to close all play a part. A house we can fully walk through gets a sharper number than one we have to guess at.
Get your cash offer
Tell us about your house and we'll walk through it with you, then give you a written cash offer, usually within 24 hours, with the math. We cover typical closing costs, there are no commissions, and there's no obligation. Call (219) 308-9106 or fill out the form. See also Sell vs. List and selling a house that needs work.