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How Cash Buyers Price Your House — Run the Math Yourself
Investors aren't guessing, and their formula isn't secret. Put your numbers into the same rule they use and see the range before the first knock on the door.
Most cash offers trace back to one formula, known in the industry as the 70% rule: the buyer estimates what the house would be worth fully renovated (the after-repair value, or ARV), multiplies by roughly 70%, and subtracts the repair budget. The remainder covers their purchase, and the 30% gap covers their carrying costs, selling costs, risk, and profit.
Knowing the formula changes the conversation. When an investor's number arrives, you can see which assumption produced it — a low ARV, a padded repair estimate, or a percentage well under 70 — and push back on the specific assumption instead of haggling blind. That's also why competing offers beat negotiating with one buyer: each buyer's ARV, repair estimate, and percentage differ, and you keep the best combination.
What the house would sell for fully renovated — from fixed-up comparable sales nearby.
Full renovation budget to reach that ARV, not just urgent fixes.
65% — heavy-repair, high-risk projects · 70% — the classic rule · 75–80% — competitive markets, landlord buyers, light repairs
Estimated offer at 70%
$255,000
ARV $450,000 × 70% − $60,000 repairs.
The realistic range (65–80%)
$232,500 – $300,000
Different buyers land at different points in this range — which is why several written offers beat one, and why competition moves the number toward the top.
How this calculator works
Estimated offer = (after-repair value × rule percentage) − repair costs. The slider covers 65–80% because the '70% rule' is a convention, not a law: experienced local buyers in competitive markets regularly pay above 70%, buy-and-hold landlords price on rental yield and often beat flippers on houses that rent well, and heavy-repair or high-risk projects push the percentage down. The calculator shows the range across the slider, not one false-precision number.
ARV is the assumption that moves the result most — it means the renovated value, supported by what fixed-up comparable homes actually sold for nearby, not the house's current condition value. Repair estimates from buyers deserve scrutiny in both directions; padding repairs is the classic way a low offer gets dressed up as generous.
Estimates are educational, not financial, legal, or tax advice, and not an offer to purchase. Actual figures depend on your property, market, and situation — confirm anything consequential with a licensed professional.
Common questions
How do cash home buyers calculate their offers?
Most start from the after-repair value — what the house would sell for renovated — multiply by 65–80% (the '70% rule'), and subtract their repair budget. The discount covers holding costs, resale costs, risk, and profit. Landlord buyers price differently, on rental income, and often outbid flippers on structurally sound houses in rentable areas — one reason offers on the same house genuinely vary.
Is the 70% rule a fair deal for sellers?
It's a starting point, not a verdict. The formula prices in real costs the buyer takes on — repairs, months of holding, resale commission, and risk — that a seller avoids entirely. Whether the resulting number beats your alternative depends on what listing would actually net after its own costs, which is a comparison our as-is vs. listing calculator runs honestly. And within the formula, competition moves the percentage: buyers bidding against each other pay closer to 80% than 65%.
Why did I get such different offers on the same house?
Because every input differs by buyer: one sees a $40,000 renovation where another sees $65,000, a flipper needs a bigger margin than a landlord, and a buyer with crews idle this month pays more than one with a full pipeline. A spread of 15–20% between offers on the same property is normal — which is precisely the argument for collecting several written offers instead of negotiating against one.
What is ARV and how do I estimate it?
ARV — after-repair value — is what the house would sell for fully renovated to the neighborhood's standard. Estimate it from recent sales of updated, similar-sized homes nearby (not from your house's current-condition value). Renovated comparable sales within a half mile and six months are the evidence investors themselves use; a real estate agent or appraiser can pin it down further.
The formula says range — competition picks the top of it
Get matched with multiple vetted cash buyers and compare real written offers on your house — free, no obligation. One buyer quotes the bottom of the range; several compete toward the top.
Questions first? Read the FAQ →