'Cash home buyer' covers everyone from national franchises to local investors to one-off flippers. They all promise speed, but the offer you receive can vary by tens of thousands of dollars depending on who you call and how much competition exists. This guide breaks down exactly how a cash offer is built, the red flags of a lowball buyer, and why comparing several offers is the only way to know you got a fair number.
How a cash offer is actually calculated
Legitimate cash buyers start with the After Repair Value (ARV) — what your home would sell for fully renovated — then subtract repair costs, holding costs, selling costs, and their target profit. What is left is your offer.
The two numbers a buyer can quietly inflate to shrink your offer are 'repair costs' and 'profit.' When only one buyer is looking, they have every incentive to pad both. Competition is what keeps those numbers honest.
- ARV (renovated market value) — the starting point
- Minus estimated repairs — the most commonly inflated number
- Minus holding + closing costs the buyer will cover
- Minus the buyer's profit margin — smaller when buyers compete
Red flags of a lowball cash buyer
Not every 'we buy houses' operation is created equal. Some tie you up in a contract, then reassign it to another buyer for a fee (wholesaling) or renegotiate the price right before closing once you are committed.
- Pressure to sign today or the offer 'expires'
- A large earnest deposit you pay, rather than the buyer
- Vague proof of funds or 'my partner has the cash'
- Price drops right before closing after an inspection
The HouseGoodbye difference: buyers bid, you choose
Instead of sending you to one investor, HouseGoodbye submits your property to a vetted network of buyers who compete for it. You see multiple real offers side by side, verify proof of funds, and choose the one that works best — on price and on timing.