It's the first question almost every homeowner asks: "If I sell my house for cash, how much will I actually get?" It's a fair question — and the honest answer is that there's no single percentage that fits every home. A cash offer in Washington, DC, Maryland, or Virginia is built from your property's specific condition, location, and repair needs, plus the current market. This article shows you exactly how a real cash offer is calculated, walks through an illustrative example, and debunks the most stubborn myth in the business. All numbers below are illustrative examples to explain the math — not a quote or a guarantee.
The formula behind every cash offer
Reputable cash buyers don't pull a number out of thin air. They start with the after-repair value (ARV) — what the home would sell for, fully renovated, in today's market — and then subtract the costs and risk of getting it there. The basic formula looks like this:
- ARV — the realistic resale value once the home is fully updated
- minus estimated repairs — roof, HVAC, kitchen, bath, cosmetics, code issues
- minus selling & holding costs — the buyer's own resale commissions, closing costs, taxes, insurance, and utilities while they own it
- minus a margin — the profit and risk buffer that lets the buyer stay in business
- = your cash offer
Notice that the offer isn't "ARV times a fixed percentage." It's ARV minus a stack of real, quantifiable costs. That distinction matters, as we'll see in a moment.
A worked example (illustrative only)
Let's run the numbers on a hypothetical DMV row house or single-family home. These figures are made up to show the method — your actual home would have its own values.
| Line item | Amount |
|---|---|
| After-repair value (ARV) | $500,000 |
| Less: estimated repairs | −$60,000 |
| Less: buyer's selling & holding costs (~10% of ARV) | −$50,000 |
| Less: buyer margin (profit & risk) | −$45,000 |
| Illustrative cash offer | $345,000 |
In this example the offer lands around 69% of ARV — but only because this home needs $60,000 in work. A nearly move-in-ready home with the same $500,000 ARV and just $10,000 of cosmetic work would calculate to roughly $395,000, or about 79% of ARV. Same buyer, same formula, very different percentage. That's the whole point.
Why the "70% of ARV" rule is a myth
You'll see the "cash buyers always pay 70% of ARV" claim repeated all over the internet. It's a rough rule of thumb investors use for badly distressed homes — not a law. The real offer moves with several factors:
- Condition & repair scope. The biggest variable. A home needing a full gut is worth far less than one needing paint and carpet, because repairs come straight off the top.
- Location. A property in a fast-moving DMV neighborhood carries less holding risk, which can support a higher offer than the same house in a slow market.
- Current market. When prices are rising and homes sell quickly, buyers can offer more; in a soft market, the risk buffer widens.
- Resale strategy. A home that needs a light refresh costs less to flip than one requiring permits, structural work, or a long timeline.
This is exactly why we buy distressed properties and homes needing major repairs at prices tied to each home's real numbers — not a one-size-fits-all percentage.
Cash offer vs. market value: the honest truth
Let's be straight with you: a cash offer is typically below full retail price. You're trading some top-line dollars for speed, certainty, and zero hassle. But "below retail price" is not the same as "below what you'd net," because a traditional sale carries costs that quietly eat into your check. The gap between a cash offer and a listing often narrows — and sometimes disappears — once you subtract commissions, closing costs, repairs, and months of carrying the property.
Comparing your net, not just the headline price
Here's the same $500,000-ARV home compared two ways: listed on the open market (after the repairs are done) versus sold as-is for cash. Again, these figures are illustrative.
| Cost | Traditional listing | Cash offer |
|---|---|---|
| Sale price / offer | $500,000 | $345,000 |
| Agent commission (~5.5%) | −$27,500 | $0 |
| Closing costs (~2.5%) | −$12,500 | $0 |
| Repairs & prep before listing | −$60,000 | $0 |
| Carrying costs (~3 months) | −$9,000 | $0 |
| Approx. net to seller | $391,000 | $345,000 |
In this scenario the listing still nets more — about $46,000 — but it also requires fronting $60,000 in repairs, doing the work, and waiting three-plus months with no guarantee the deal closes. For a home in good shape, the listing usually wins. For a home that needs significant work, the numbers can flip entirely, and the certainty of a cash sale becomes the smarter choice. The right answer depends on your home and your timeline.
How to make sure your offer is fair
A legitimate buyer will happily show you the math. Before you accept any cash offer:
- Ask the buyer to walk you through how they reached the number — ARV, repairs, costs, and margin.
- Get more than one offer so you can compare on equal terms.
- Confirm there are no hidden fees and that the buyer covers closing costs.
- Watch out for last-minute "renegotiation" after inspection — a real offer holds.
Curious how it works end to end? See our simple four-step process. There's no cost and no obligation to find out what your home is worth in cash today.