How Much Do Cash Home Buyers Pay? How We Calculate an Offer (With Real Numbers)

The formula every cash buyer uses

Whether it’s a national iBuyer or a local company like ours, the offer comes from the same four numbers:

Offer = After-Repair Value − Repair Costs − Holding & Resale Costs − Profit Margin

• After-repair value (ARV): what the house would sell for on the open market fully renovated, based on recent sales of similar homes nearby.
• Repair costs: everything from a roof and electrical panel to paint and landscaping, estimated by someone who actually does the work.
• Holding and resale costs: purchase closing costs, insurance, taxes and utilities during the renovation, and the commission and closing costs when the renovated house is sold — typically 8–12% of ARV all in.
• Margin: the buyer’s profit for taking the risk. Honest local buyers run 10–20% of ARV depending on the project; anyone promising to buy at full retail is either listing your house for a fee or not really a cash buyer.

A worked St. Petersburg example

A 3-bed/2-bath 1,400 sq ft block house in Disston Heights, inherited, original kitchen and baths, a 20-year-old roof, a Federal Pacific panel, and a garage full of belongings.

Different buyers will land in different places depending on their repair estimate and margin. We show sellers the line items; some buyers don’t.

Comparing it to listing — net to net

The same house listed as-is might attract an offer around $265,000 from a financed buyer or an investor — if it can get financed, which the roof and panel make doubtful. Subtract a 5–6% commission (~$15,000), 1–2% seller closing costs (~$4,000), inspection credits (~$5,000), and 4–6 months of taxes, insurance, utilities and yard care (~$6,000–9,000), and you net roughly $232,000–240,000 — in five to six months, after dealing with showings and at least one deal falling through. The cash offer nets $221,500 in two weeks with nothing to manage. Some sellers prefer the extra $10,000–15,000 and the wait; many don’t. The honest answer is that it depends on your situation, and we’ll tell you which we think is right for yours.

What makes an offer go up or down

• Location and lot. Waterfront, large lots and walkable neighborhoods raise ARV and therefore the offer, even for bad houses.
• Repairs no lender will finance. These don’t hurt a cash offer much because we’re doing them anyway — but they destroy a retail sale.
• Occupancy, liens, probate. Time and legal costs get priced in; a buyer who handles them in-house prices them lower than one who doesn’t.
• Flood zone and the 50% rule. See our FEMA 50% rule guide; the lot may carry most of the value.
• Your timeline. A flexible closing date is worth something to a buyer juggling projects.

How to tell a real cash buyer from a wholesaler

Ask three questions: Will you show me the math? Will you put a deposit with a title company? Who is actually closing on my house, and is the offer contingent on you finding someone else to buy it? There is nothing wrong with a buyer bringing in a partner, but you should know up front who is closing and that the offer isn’t contingent on them finding a buyer. We tell you who is closing, we deposit at the title company, and we show you the numbers.

This guide is general information about Florida law and local process from a cash home buyer, not legal, tax or financial advice. Laws and procedures change; confirm details with a Florida attorney or the relevant county office.