How cash buyers calculate your offer
Almost every "we buy houses" offer starts from the same formula. Once you know it, you can tell in a minute how much room there is to negotiate.
Step 1: after-repair value
The buyer estimates what your house would sell for fully fixed up, using nearby sales. Texas doesn't publish sale prices, so investors lean on agents' data, which is one reason estimates vary.
Step 2: the 70% rule
A renovating investor typically pays up to 70% of after-repair value minus repairs. The 30% covers their financing, holding costs, selling costs and profit. In hot areas some pay 75%.
Step 3: the wholesaler's fee
If the person texting you is a wholesaler, they subtract their fee from that number, because they'll sell your contract to that investor. That's why wholesaler offers are often 10% or more below what investors themselves would pay.
Worked example
| Item | Amount |
|---|---|
| After-repair value | $300,000 |
| Repairs | $30,000 |
| Investor maximum (70% × $300,000 − $30,000) | $180,000 |
| Wholesaler fee | $20,000 |
| Offer you receive | $160,000 |
| Listing as-is: about $265,500 − 5.5% commission − 1.5% costs − 3 months of carrying costs | about $244,000 |
In this example, listing nets about $84,000 more than the cash offer, but takes months and needs showings. Whether that's worth it is your call. The calculator runs this for your own numbers.
How we estimate listing as-is
We take your good-condition value, subtract 115% of the repair cost (retail buyers discount repairs), then subtract agent commissions, seller closing costs and the monthly cost of keeping the house until it closes. You can change every assumption.
Common questions
What is the 70% rule?
Investors who renovate and resell usually pay no more than 70% of the after-repair value, minus repair costs. On a $300,000 house needing $30,000 of work, that's $180,000.
How much does a wholesaler make?
Their fee is the difference between what they contract to pay you and what an investor pays them for the contract. Fees of $5,000 to $30,000 are common, and it all comes out of the price you accept.