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Cash offer math, explained
How much do cash buyers offer in Central PA?
You'll see a lot of "we buy houses for cash" mailers. Most of those numbers come from the same rough formula. Here's how it works, with a labeled example and a small calculator you can try yourself.
The common investor formula
A lot of cash buyers and investors price a house like this:
Offer ≈ (about 70% of after-repair value) − repairs
After-repair value, or ARV, is what the house would likely sell for after the buyer does the work. It's not today's as is value. The discount (often around 70%) leaves room for their profit, holding costs, closing costs and risk. Then they subtract whatever they think they'll spend to get it ready.
That's why a "cash offer" can look fast and easy, and still leave a big chunk of your equity on the table.
A worked example (labeled on purpose)
Example only
This is a worked example, not your house and not an offer. Numbers are rounded to keep the math easy to follow.
- After-repair value (what it might sell for fixed up): $300,000
- Common investor discount: 70% of ARV = $210,000
- Estimated repairs: $30,000
- Common starting offer: $210,000 - $30,000 = $180,000
So on a house that might be worth around $300,000 fixed up, a buyer using this formula may open around $180,000. If the house is already in decent shape as is, that gap is mostly their profit, holding costs and risk, not "what the market will pay."
Your numbers will be different. A lighter repair list, a hotter street, or a buyer who really wants the house can push the offer up. A heavier repair list or a buyer who plans to wholesale the contract can push it down. The formula just helps you see what you're looking at.
Try the formula with your own rough numbers
Plug in an after-repair guess, a discount percent and a repair estimate. It shows the common starting point. It does not tell you what your house is worth as is, and it isn't an offer.
Cash offer formula calculator
Rough numbers are fine. This runs in your browser only. Nothing's saved or sent anywhere.
Illustration only. Not an appraisal, offer or promise of any price. Real cash offers depend on condition, comps, buyer costs and the market that week.
What this means for Central PA sellers
If someone mailers you a number that lines up with 70% of ARV minus repairs, you're probably looking at an investor worksheet, not a full market price. That doesn't make them the bad guy. It means their job is to buy low enough to make the deal work for them.
You've still got options:
- Compare the offer. See how to compare a cash offer first, or get a free second opinion.
- Check the price of speed. A low offer can cost six figures for a few weeks of "fast." Here's that math for Cumberland County cash offers.
- Put several as is buyers on it. We work with local and national buyers who buy in any condition. When they compete, you're not stuck with one worksheet.
- Ask about the 7-Day Stress-Free Home Sale. Cash buyers and owner occupants can compete in one weekend of showings. Here's how the 7 days work and the full cash offer guide path.
Past results don't guarantee future results. Every home and every market week is different, and any example numbers on this page are for illustration only.
Want a real look at your as is options?
Send me the address with the form on this page, or call or text (717) 510-1452, eXp Realty office (888) 397-7352 x1034. I'll show you what competing as is buyers and the 7-Day plan could look like. It's $0 with no obligation.
$0 cost. No obligation.
Tell Josh about your home and he'll walk the property, run the numbers and show you what competing as is buyers and the 7-Day Stress-Free Home Sale could look like. You always reserve the right to accept, reject, or negotiate any offer.
Prefer to talk? Call or text (717) 510-1452, eXp Realty office (888) 397-7352 x1034.