process · 7 min read
How cash buyers actually price your house (the formula)
The math cash buyers use to land on a cash offer: ARV, repair cost, holding cost, and target profit. Demystified.
The 70% rule (most common starting point)
Many cash buyers price as: offer = (ARV × 0.7) - repair cost. ARV is the after-repair-value — what the house would sell for retail post-renovation. The 30% margin covers their renovation contingency, financing, holding cost, transaction costs, and profit.
When you'll see better than 70%
Cleaner property needing little repair (closer to 75-80%), rental-portfolio buyers paying for cash flow rather than flip margin, hot submarkets where cash-buyer competition compresses margins.
When you'll see worse
Heavy rehab inventory, slow markets, problem title, or situations where the buyer needs to close very fast (compresses their due diligence and forces a more conservative number).
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