How do cash offers work, and what makes one fair?

How a cash offer is calculated

A fair cash offer isn’t a percentage pulled from thin air. It starts from your home’s after-repair value (ARV), what it would sell for fully fixed up, based on real recent sales of similar nearby homes. From that, a cash buyer subtracts:

• the cost of repairs the home needs,
• the carrying and closing costs any buyer pays while owning and reselling,
• and a margin that lets them take on the risk and the work.

What’s left is a number they can pay in cash and close on quickly. The single biggest swing factor is condition, which is why an honest buyer wants to understand the house before committing to an exact figure.

How much do cash buyers pay?

There’s no fixed percentage, a light-cosmetic home in a strong area nets a very different number than a house that needs a new roof and a gut renovation. That’s exactly why we ground every offer in nearby sales and real repair costs instead of a flat “we pay X%.” You can see the approach on our cash offer page.

Are cash home buyers legit?

The good ones are, and there are plenty of bad ones. Signs of a legitimate buyer:

• a real, local presence and a name you can look up,
• a written offer with no hidden fees,
• time to review the offer, no pressure to sign on the spot,
• and a clear willingness to say a cash sale isn’t right for you if it isn’t.

Red flags

Walk away from anyone who pressures you to sign immediately, asks for money upfront, wants you to sign over the deed before closing, or refuses to put the offer in writing. A fair offer stands on its own and gives you room to think, including time to compare it against listing with an agent.

The bottom line

A fair cash offer trades a bit of top-line price for speed, certainty, and selling as-is with no fees. If that trade fits your situation, start the chat below with your address and we’ll walk you toward a grounded range with the math shown.

The formula, line by line

Most serious cash buyers in Florida price a house the same way. The number is not a mood, it is arithmetic:

A worked example, using round numbers for a South Florida single-family home:

• After Repair Value (ARV): $400,000. What the home would sell for on the open market once it is fully renovated, based on comparable sales nearby in the last few months.
• 70% of ARV: $280,000. The starting envelope.
• Repairs: $45,000. Roof, kitchen, two bathrooms, paint, flooring, permits.
• Offer: about $235,000. That is the number when you sell directly to the party that actually closes, because in the 70% rule the buyer’s margin is already inside the envelope rather than tacked on at the end.

The third term of the formula is where sellers get surprised. If a middleman puts your house under contract and then assigns that contract to someone else, their fee comes out of the same envelope, commonly $5,000 to $15,000 in South Florida, and your $235,000 becomes something closer to $220,000. The arithmetic did not change, the number of hands did. That is why “are you the one closing?” is worth asking out loud.

If a buyer will not walk you through those four lines for your specific house, that is a signal. Ask what ARV they used and which comparable sales it came from.

Where the other 30% actually goes

The gap between ARV and your offer is not all profit. It covers real costs that the buyer absorbs and you do not:

• Selling costs on the far end. When the renovated home is resold, agent commissions and closing costs typically take 6% to 8% of the sale price.
• Holding costs. Taxes, utilities, and above all Florida property insurance, which has become one of the most expensive line items in the state, for every month the project runs.
• Cost of money. Cash is not free. The capital tied up in your house has a price whether it is borrowed or not.
• Risk. Permits stall, a roof turns out worse than it looked, the market moves. Renovation budgets overrun far more often than they come in under.
• Profit. Yes, there is a margin. Anyone who tells you otherwise is not being straight with you.

Net, not price: the only comparison that matters

Sellers compare the offer to the listing price of the house down the street. That is the wrong comparison. Compare what lands in your account, on what date. A retail sale in South Florida typically gives up 5% to 6% in commissions, 1% to 3% in buyer concessions and repair credits after inspection, whatever the lender’s appraisal forces, plus every mortgage, tax, and insurance payment during the months it takes to close.

Run your own numbers both ways before you decide. If the retail path nets you clearly more and you can wait, take it, and we will tell you so. Our cash offer page shows the side by side.

Red flags of an unfair offer

• A number before anyone has seen the house that then drops sharply after the walkthrough. An initial range is normal; a bait number is not.
• Silence about assignment. Some buyers put a house under contract and sell that contract to a third party. That is legal and common, but you deserve to be told whether the person signing is the one closing.
• Pressure to sign today. A fair offer survives a night of sleep and a call to your attorney.
• Token earnest money. A serious buyer puts a real deposit with the title company.
• Vague closing costs. Ask plainly who pays title, doc stamps, and whether there are any fees to you at all.

Five questions to ask any cash buyer

1. Can I see proof of funds?
2. Are you the one closing, or will you assign this contract?
3. What ARV and repair figures did you use, and can I see the comparable sales?
4. How much earnest money goes to the title company, and when?
5. Is the price firm after the walkthrough, or can it be renegotiated?

We answer all five before you sign anything, and you can ask them on the phone at (786) 940-9908.

One last thing worth saying plainly

A cash offer is a tool, not a verdict on your house. It is the right tool when time, condition, or certainty are the binding constraint, and the wrong one when none of the three applies. If you tell us your situation honestly, we will tell you honestly which of those two you are in, even when the answer costs us the deal.

This page is general information about how sales like these usually work in Florida, not legal or tax advice. For your own case, talk to a Florida attorney or your accountant.