The cash house offer process explained
How does a cash offer on your house work?
You might be wondering how selling your house to a cash buyer works? How do we come up with an offer price? Will we just low ball you? Are we trying to “steal your house”?
I can’t speak for every cash buyer out there but I can speak for Home Buyer Louisiana. The way we determine a cash offer is actually pretty simple. We start with the end in mind and then work backwards.
The math for our cash offer works like this:
- What would the house be worth if we fixed it up and updated it to a fresh modern home? This will be our estimated sales price
- What will it cost to sell the house? This is generally 10% of the sales price which covers our realtors commission, the buyers realtors commission, closing costs and concessions.
- What will it cost to repair the house? This includes fixing any issues and updating the house so it looks modern and new for a home buyer.
This gives us our breakeven buy price.
Estimated Sales Price – Cost to sell – Cost to Repair = Break Even Price
In other words if we bought the house at that price we should cover our costs but wouldn’t make a profit. Obviously we aren’t a charity and need to earn a profit to justify the time, effort and risk involved with taking on the project. The profit will vary depending on the time and effort involved.We just want to make sure the profit justifies our risk and hopefully that number works for you.
This gives us our cash offer
Break Even Price – Minimum Acceptable Profit = Cash Offer
It’s pretty simple really. We are always transparent and if you have the time, energy and resources to do the repairs yourself then we recommend that you do and you will capture that profit for yourself. If you would prefer to just sell the house fast without putting any work into it then selling it to us for cash may be a good option.
No pressure when you get a cash offer from us
We speak to lots of homeowners about buying their house for cash and we definitely don’t need to buy every one we speak to’s house. We have a philosophy that everyone needs to smile at the closing table and we take that to heart. If our offer doesn’t work for you there are no hard feelings. We will give you some advice and feedback on how you can get your price by going another route.
How do we make cash offers over the phone?
It’s simply based on a phone conversation, where we ask you questions about your home. We generally estimate the cost of repairs, and the value of a renovated home. With that we can come to a pretty accurate offer. We call this a “ballpark offer”.
Obviously we do need to take a brief walk through of the home before giving a written offer. Our objective is to make sure we are both aligned before we do this. We want to avoid wasting your precious time and make the entire process hassle free!
Got any more questions?
Don’t hesitate to give us a call or fill in our online enquiry and we will call you. We are happy to talk about your options and there is never any obligation or pressure to sell your house to us.