The Short Answer
Cash buyers typically offer 60-80% of a property's after-repair value (ARV). That sounds like a big discount — but by the time you subtract agent commissions, repair costs, and months of carrying costs from a traditional sale, the actual difference in what you walk away with is often much smaller. For distressed properties, the cash offer is sometimes competitive with a traditional net.
How Cash Buyers Calculate Offers
Most cash buyers use a variation of this formula:
ARV (After-Repair Value)
— What the house would sell for in fully repaired, updated condition
–
Estimated Repair Costs
— Materials, labor, contractor margin
–
Holding Costs
— Taxes, insurance, utilities, financing during rehab (typically 3-6 months)
–
Selling Costs
— Agent commissions, closing costs when they resell
–
Profit Margin
— Typically 10-20% of ARV
=
Cash Offer to You
This is why a cash offer typically comes in at 60-80% of ARV. It's not arbitrary — it's math. A legitimate buyer will show you their numbers if you ask.
The Real Comparison: Cash Offer vs. Traditional Sale
Let's use a real example. A house in Harrisburg with an ARV of $175,000 that needs $25,000 in work.
Cash Sale
Traditional MLS Sale
The actual gap: ~$18,000 over 3-4 months
That's real money. But for many sellers, the speed, certainty, and zero effort of a cash sale is worth $18,000. For others — especially those who can handle the repairs and the wait — the traditional route makes sense. The math should drive the decision.
When a Cash Offer Makes Financial Sense
The house needs significant repairs
If you're looking at $30K+ in repairs, that money comes directly out of your traditional sale net. The gap between cash and traditional narrows significantly.
You're carrying two properties
Every month you own the property costs money — mortgage, taxes, insurance, utilities. If you've already moved or are paying two mortgages, carrying costs add up fast.
You're facing foreclosure
If the alternative to a cash sale is a completed foreclosure, the comparison changes entirely. A foreclosure destroys credit for 7 years and you may walk away with nothing.
The property is out of state
Managing a traditional sale from out of state is expensive and stressful. Contractors, cleanouts, showings, negotiations — all require either travel or a local property manager.
Speed is the priority
Relocation, divorce settlement, estate closure — situations where time matters. Four months of uncertainty has real costs beyond the mortgage payment.
Compare offer price to walk-away net
Cash offers and listing prices are not the same thing as net proceeds. The calculator lets you adjust repairs, cleanout, holding costs, payoff, commission, and closing-cost reserves so you can compare the estimated walk-away number.
Open the net proceeds calculatorWe give written cash offers in 24 hours.
No obligation. We explain our math. Written offer within 24 hours.
Common Questions About Cash Buyer Offers
What percentage of market value do cash buyers pay?
Cash buyers typically offer 60-80% of a property's after-repair value (ARV). The exact percentage depends on the property's condition, the local market, and the buyer's model. Higher-condition properties in active markets may see offers closer to 75-80%. Properties needing significant repairs might come in at 60-65%.
What is after-repair value (ARV)?
After-repair value is what the property would sell for on the open market if it were in fully updated, move-in ready condition. Cash buyers calculate offers based on ARV, not current as-is value — then subtract estimated repair costs and their margin.
Does a lower cash offer actually cost me money?
Not always. When you factor in agent commissions (5-6%), closing costs (1-3%), repair costs, and carrying costs during the months a traditional sale takes, the net proceeds from a cash sale and a traditional sale are often closer than the headline offer prices suggest. The comparison depends heavily on the property's condition and how long you'd carry it.
How do I know if a cash offer is fair?
Ask the buyer to explain their math: what ARV they used, what repair costs they're accounting for, and what their target margin is. Then do your own research on comparable sales in the area. A transparent buyer will walk you through this.
Can I negotiate a cash offer?
Yes. Cash offers aren't take-it-or-leave-it. You can counter, ask for a higher price, ask for a faster or slower close, or ask for different terms. The buyer may not budge much if their math is tight, but negotiating is always reasonable.