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
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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 calculatorFind Out What We'd Offer on Your Property
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