Key takeaways
It starts with comparable sales. Most offers begin with what similar, updated homes nearby sold for.
Risk costs you money. Buyers price in what they can’t see, the time to resell and the problems lenders won’t finance.
Some levers are yours. Access, disclosure, clean title, cleanout and closing date all remove risk a buyer would price in.
It starts with after-repair value
Most cash offers begin with an estimate of what your home would sell for once it is fixed up. Buyers build it from recent sales of similar, updated homes nearby.
Appraisers working for mortgage lenders follow similar logic. Fannie Mae asks for at least three closed comparable sales, generally from the last 12 months, and calls sales from within the neighborhood the best indicator of value.1 Cash buyers are not bound by those rules, but the method is the same: find close matches, then adjust for differences.
Adjustments for differences between your home and each comparable are supposed to reflect the market, not a fixed formula.2
Ask for the comps
A buyer that shows you the sales it used for after-repair value gives you something to check. If the comps are larger, newer or in a better location, the number may be too high to hold.
Repairs, and the risk buyers can’t see
Buyers subtract their repair estimate from the price. ATTOM notes that veteran flippers estimate rehab costs typically run between 20% and 33% of after-repair value.3 Buyers then add a cushion for what an inspection can’t see, such as what is behind the walls.
Some problems shrink the pool of buyers. Fannie Mae requires homes with deficiencies that affect safety, soundness or structural integrity to be repaired before a loan, and evidence of infestation, dampness or abnormal settlement needs proof of correction or a professional report.4 When fewer financed buyers can compete, cash buyers price in both the repair and the risk.
Flood zones are priced too. Federally regulated lenders can’t make a mortgage loan on a building in a special flood hazard area, where federal flood insurance is available, unless it carries flood insurance.5
Holding time and thin margins
The typical home flipped in the second quarter of 2026 took 161 days from purchase to resale.3
ATTOM put the typical gross flipping margin at 21.5% in that quarter, before rehab and other costs.3 Every month a buyer holds the house costs it interest, taxes and insurance, so slower markets and thinner margins mean lower offers.
Margins vary by market. In the same report, the lowest gross returns among metros of more than 1 million people were a 0.3% loss in San Antonio, then Dallas at 1.8%, Austin at 2.8% and Houston at 3.7%.3
The 70% rule with real numbersThe buyer’s exit plan
What the buyer plans to do with your house changes what it can pay.
Flipper
Prices from after-repair value, minus repairs, holding costs, resale costs and profit.
Landlord
Prices from rent and expenses, not after-repair value.
Fannie Mae’s income approach assumes a property’s market value is related to the market rent it can be expected to earn.6
Wholesaler
Prices to leave room for its fee when it sells your contract to another investor.
Missouri’s required wholesaler disclosure warns that the agreed price may be below market value.7
The median gross rent in the US was $1,487 a month in 2024, according to the Census Bureau’s American Community Survey.8 That is a median across all rentals, not what your house would rent for. Where rents are low compared with prices, rental math supports a lower offer.
What you can change
You can’t move your house, but you can remove risks a buyer would otherwise price in. These are practices, not guarantees.
Levers in your control
- Let buyers see the whole house before they sign, so fewer unknowns become price cuts later.
- Disclose known problems up front, and share any reports or permits you have.
- Clear title issues, liens or estate paperwork early.
- Agree in writing what stays and what goes.
- Offer a closing date and move-out that fit the buyer.
- Get several written offers and compare them net to net.
Get offers you can compare.
See verified cash buyers in your state and compare their written offers.
Common questions
They estimate the home’s value after repairs from recent comparable sales, subtract repairs, then subtract their own costs and profit. Several buyers publish this as a formula.
Sources
- Fannie Mae — Selling Guide B4-1.3-08: comparable sales (Accessed October 26, 2026)return
- Fannie Mae — Selling Guide B4-1.3-09: adjustments to comparable sales (Accessed October 26, 2026)return
- ATTOM — Q2 2026 U.S. Home Flipping Report (Accessed October 26, 2026)return
- Fannie Mae — Selling Guide B4-1.3-06: property condition and quality of construction (Accessed October 26, 2026)return
- Legal Information Institute, Cornell Law School — 42 U.S.C. 4012a: flood insurance purchase requirements (Accessed October 26, 2026)return
- Fannie Mae — Selling Guide B4-1.3-10: cost and income approach to value (Accessed October 26, 2026)return
- Missouri Revisor of Statutes — RSMo 407.3600: real estate wholesaler disclosure (Accessed October 26, 2026)return
- U.S. Census Bureau, American Community Survey (via Census Reporter) — Median gross rent, table B25064, 2024 1-year estimates (Accessed October 26, 2026)return
