Cash Home Buyers, Explained by One
Most pages about cash home buyers are written by referral sites that have never bought a house. We buy them for a living, here's how the industry really works, what offers really look like, and how to get the best outcome.
You'll work directly with Eric and Carson, the owners, not a call center.
The Four Kinds of Cash Buyers
"Cash buyer" covers four very different businesses, and knowing which one you're talking to changes everything:
- Local investors and flippers: individuals or small companies renovating and reselling. Quality varies enormously.
- National direct buyers (like us), companies that buy in many markets, either directly or with local partners.
- iBuyers (Opendoor, Offerpad), algorithm-driven buyers of mostly move-in-ready homes in select metros, charging ~5% service fees.
- Lead sellers: websites that look like buyers but exist to sell your contact information to investors. They never buy anything. If a site won't say who is actually purchasing, this is usually why.
The Offer Formula Nobody Publishes
Nearly every professional cash buyer uses a version of the same math:
Offer = ARV × (70–85%) − Repair Costs
ARV (after-repair value) is what the renovated house would sell for. The percentage covers the buyer's holding costs, resale costs, risk, and profit, traditionally 70% ("the 70% rule"), though in competitive markets and lighter-rehab houses it often runs 80–85%. For worked examples at three price points, see our deep-dive on what cash buyers actually pay. A buyer who won't discuss how they reached their number is telling you something.
We walk every seller through our version of this calculation, line by line, with the comparable sales we used. Try our cash offer calculator to see the formula applied to your own numbers, including the side-by-side net versus listing with an agent.
When a Cash Sale Nets More Than You'd Think
On a market-ready house, listing usually wins on price. But consider a house needing $60,000 of work: a listed as-is sale attracts the same investors, except now you're also paying a 5–6% commission on the sale, covering seller closing costs, and carrying the mortgage, taxes, and insurance for the months it takes. The honest comparison is net to you, after everything, weighted by certainty, and that's the comparison our options guide walks through.
Getting the Best Outcome
- Get more than one offer. Seriously, including ours. Competing offers keep everyone honest.
- Ask every buyer for their math. ARV, repair estimate, margin. Silence is an answer.
- Verify the closing agent. A licensed title company or attorney should hold every deposit and document.
- Don't sign an exclusive contract to "see a number." Offers should come before commitments, not after.
- Watch for post-contract price drops. A common bad-actor tactic is renegotiating downward right before closing. Ask any buyer directly: under what circumstances would your offer change?
Frequently Asked Questions
How much do cash home buyers typically pay?
Professional buyers typically offer 70–85% of the after-repair value minus repair costs, depending on the market, the scale of the renovation, and their cost of capital. On a house needing little work that can approach the as-is market price; on a heavy rehab it will be far below the eventual resale price, because the buyer is funding that gap in repairs, carrying costs, and risk.
Are cash home buyers legit, or is it a scam?
The model is legitimate; specific operators aren't always. Red flags: pressure to sign the day of the walkthrough, unwillingness to name their title company, requests for any kind of upfront fee, offers that drop sharply right before closing, and contracts with long exclusivity periods. A legitimate buyer survives scrutiny, encourage it.
Who pays closing costs in a cash sale?
With us, we cover typical seller closing costs, title fees, escrow fees, standard transfer charges. You'd still be responsible for paying off your own mortgage or liens from the proceeds and any prorated property taxes you owe through closing day. Your settlement statement itemizes every dollar before you sign.
Should I get a cash offer even if I might list with an agent?
Yes, it costs nothing and gives you a real number to compare against a listing agent's net sheet instead of guessing. About a third of the sellers we talk to end up listing traditionally, and we think that's exactly how it should work.
Do cash buyers pay more for houses in good condition?
Yes, the offer formula rewards condition directly. A smaller repair line and a lighter renovation mean a higher percentage of ARV, so a well-kept house can see offers in the 80–85% range while a full-gut project sits nearer 70%. If your house is genuinely market-ready, that's also exactly the situation where listing deserves a serious look, and we'll say so when it's true.
Related Guides
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