3 Steps to a FREE, No Obligation Cash Offer
We make the process of buying your home or vacant land as easy as possible. Here's the process breakdown:
How Do We Make Cash Offers?
"How much are you offering" is the question we hear the most often. It's a fair, as-is, cash offer. Below is a breakdown of our calculation for making an offer for your house.
First we use a simple formula. There are four parts of the formula which we cover step by step below.
The formula for making an offer is:
ARV - Repairs - Transaction Cost - Minimum Profit = Your Offer
Let's explain what this all means
1) The ARV stands for After Repair Value. This is the price the home will likely sell for after it's completely renovated. We look at sales of completely renovated homes in your neighborhood. We use the MLS (multiple listing service) to find the most accurate data.
2) Repairs is the estimated cost to completely renovate the property top to bottom. In many cases the property does not need a full renovation so if the house just needs a new kitchen or bathroom the repair cost is lower. This allows us to pay more than the competition.
3) The transaction cost is the cost for us to sell the house when it's fixed up. This is about 10% of the ARV or after repair value.
4) Finally we calculate the minimum profit we would need to make when we sell the house. We are running a business to provide and feed our family and if we aren't able to make money our business would cease to exist. Our minimum profit depends on the purchase price of the home. Typically the more we pay for a home, the more profit we need to make to offset the risks.
We look at what we can sell the house for when it's finished, deduct the repairs, transaction cost and profit to provide you our maximum allowable offer - the purchase price for your home!