There are some circumstances where you may need to sell your home to a cash buyer—for instance, if your house is distressed or in need of major repairs, your lenders have started the foreclosure process, you need a quick exit strategy, or you simply don’t have the time and resources to worry about staging and selling your house on the traditional real estate market. In these cases, getting an offer from a local cash home buyer is a fast and easy way to sell your property.

However, selling your house for cash means you will likely not receive market value on your home. Instead, you will benefit from the quick, stress-free process and enjoy the reduced fees associated with cash buyers.

What Is a Cash Home Buying Company?

A cash buyer is an individual or company with the funds to make an all-cash offer on your house without going through the financing process. Cash home buying companies purchase houses directly from homeowners instead of through the competitive real estate market, so there are fewer contingencies, no appraisals, and less risk of a deal falling through due to financing.

There are, unfortunately, many predatory cash buying companies looking to scam homeowners. To avoid working with an unreliable or dishonest company, find a local, trustworthy cash buyer that wants to invest in your community.

What Are the Benefits of Selling Your House for Cash?

Cash home buying companies streamline the selling process for homeowners. If you sell your house for cash, you can expect several benefits:

  • A fast closing process (as little as a week)
  • Fewer contingencies
  • Sell in any condition
  • No cleaning, staging, repairing, or upgrading required
  • Less stringent inspections
  • Guaranteed timing
  • No appraisals
  • Simple, low-stress process
  • No obligation offer
  • Can help prevent foreclosure
  • Save money on repairs

Sell your house as-is to a cash buyer and get a fair offer on your home.

How Much Do Cash Home Buyers Pay?

The offer a cash home buyer will make on your house depends on several factors, including the buyer you work with, the neighborhood you live in, the current real estate market, and details of your property.

Keep in mind that an all-cash offer will likely be less than what you could receive after selling on the open market. However, cash home buyers can offer a fast, easy selling process with reduced fees, which is worth a slightly reduced offer in many circumstances.

Cash Offer Calculator: A Starting Place for Homeowners

It’s difficult to calculate the offer you can expect on your home from a cash buyer because there are so many factors at play. Some cash home buying companies will pay as little as 50% of the after-repair value (ARV) of your home, while others may offer up to 85%. Use the 70% ARV formula (estimated sales price x 70% - repair costs = max offer) to see what you might expect.

How to Determine a Fair Cash Offer for Your Home: A Closer Look

Use the 70% Rule

Selling your house for cash is the easiest way to turn your equity into cash. Selling your home for cash, however, means you're not going to get the full market value for your home. The point of selling your home for cash is that the investor buying the home will also be investing their time and money into repairing the home. They are not going to give you a full market price offer for your home. Instead, they will likely give you some variation of the "70% rule". Here is the formula that a real estate investor typically uses:

ESTIMATED SALES PRICE X 70% – REHAB COSTS = MAX OFFER

Typically with this calculation, the real estate investor will gross 30% in additional income. This money will go toward holding costs, insurance, overhead, and other expenses. Their maximum offer will typically yield around an 8-15% profit after all other expenses are taken care of.

Using the formula above, assume you are selling a house that needs $40,000 in rehab to be able to sell it for $100,000. The maximum offer you should expect would be:

100,000 X 70% – 40,000 = $30,000

You would end up receiving a $30,000 cash offer for your home. This may seem low, but the real estate investor needs to have the funds to remodel the home and sell it for a modest profit.

The benefit of this arrangement is that you get cash pretty quickly, but if you have put some time and money into remodeling the home, you may want to get the home valued by a home appraisal service. They can determine the full market value for your home, which is likely higher than what a cash offer would be. From there, you can consider selling your home on the market or selling your home for cash.

Manage Your Expectations When Determining a Fair Cash Offer

It is very common for home sellers to overestimate the value of their home based on their own sentimental attachments to the home. It's important, however, to keep in mind that location is a big factor that will determine a fair cash offer for your home. If your home is in a good and highly-coveted neighborhood, you're more likely to receive a higher cash offer for the home.

The real estate investor must also take into consideration some other factors, such as the estimated renovation costs, to determine a fair cash offer for your home. Even if you replaced your carpet just a few years ago, that doesn't mean you're going to get a better cash offer for your home. Certain systems, such as heat pumps and electrical systems, don't last forever and need to be replaced every 12-15 years.

The Bottom Line of a Fair Cash Home Offer

The bottom line is that if you're considering selling your home for cash, location and estimated rehab costs will be the main factors that will determine the cash offer you'll receive. If you have completed additional renovations and your home is in a coveted location, you will likely receive a higher cash offer for your home.

The best way to determine a fair cash offer is to contact an experienced cash home buyer and ask for an estimate.

Get a Fair Cash Offer & Sell Your Home for Cash at New Again Houses

At New Again Houses, we buy, fully remodel, and sell homes to new families to enjoy for years to come. Unlike other cash buyers, we will never sell your contract or your information—so you can trust us to restore your old home and give it the love it needs.

We’ve been in the business of helping local homeowners sell their homes since 2008. Based in Bristol, TN, and serving homeowners nationwide, the New Again Houses team would love the opportunity to invest in the community by making your older home new again.

Together, we transform not only houses but also the lives of our clients.

Are you ready to sell your house, get a cash offer, and close in a matter of days? Contact us today to get started.

Matt Lavinder & Sam Ferguson

Matt Lavinder founded New Again Houses in 2007 and has been rehabbing properties ever since! He enjoys finding creative solutions to real estate problems and transforming distressed houses into great homes. Sam Ferguson was deeply involved with non-profit organizations before joining New Again Houses as the Vice President, and Owner/COO of New Again Franchising. They have achieved outstanding accomplishments and involvement in their local community before creating the New Again Houses franchise model they are passionate about spreading nationally.

We buy houses and transform them into fully remodeled homes.

Get a fast & fair offer for your home and close at your convenience.