Cash Offer Math: What a Fair Cash Offer Looks Like in Sacramento

Every cash buyer in Sacramento says their offers are fair. Most won't show you the formula. I'm going to, partly because transparency is our whole pitch and partly because a seller who understands the math is a seller who can spot a lowball from any buyer, including us. Check everyone's numbers. Especially ours.

The formula everyone actually uses

Strip away the branding and every legitimate cash buyer prices a house the same way:

Offer = After-Repair Value − Repair Costs − Selling & Holding Costs − Margin

Nothing exotic. The differences between buyers live inside each term, so let's open them up with a worked example: a 3-bed, 2-bath ranch in Citrus Heights, structurally sound but original everything.

Term by term, with numbers

Term	Our example	What to watch for
After-repair value	$485,000	Should come from 3–5 recent nearby sales of renovated comparables — ask to see them
Repair costs	−$62,000	Line-itemed: roof, HVAC, kitchen, baths, flooring, paint, landscaping
Selling & holding	−$38,000	Commissions and closing on resale, taxes, insurance, utilities, loan cost for ~5 months
Margin	−$48,000	Roughly 10% of ARV; this is the profit and the risk buffer
Offer	$337,000	About 69% of ARV in this case

You may have heard flippers talk about the "70% rule" — offer 70% of ARV minus repairs. It's a crude version of the same arithmetic, and it flexes with the market: in slow markets buyers price more risk in; in hot ones competition squeezes margins to 8 or 9 percent. If a buyer's number implies a 25% margin, that's not risk pricing, that's hoping you won't do math.

Where lowballs hide

Not usually in the margin — that's too easy to catch. The two favorite hiding spots are inflated repair numbers ($45 per square foot to paint, a $60,000 "foundation concern" from a crack that's cosmetic) and a lowballed ARV built on cherry-picked comps from the rough end of the neighborhood. The defense is the same for both: make the buyer show the line items and the comps. A legitimate buyer will. We put both on one page and walk through it at the kitchen table.

The other classic is the re-trade: a decent number to win the contract, then a price drop two weeks later after "inspection findings." You can smell this one in the contract itself — long inspection periods and vague repair contingencies are the tell. Our offers are made after we've seen the house, so there's nothing left to discover and nothing to re-trade with.

So is a cash offer ever the better net?

Run the listed-sale version of the same Citrus Heights house honestly. Sell as-is on the MLS at $395,000 to a buyer who'll want credits anyway: minus 5% commission and closing (about $24,000), minus the credit bidding war after inspection (call it $10,000), minus four months of carrying costs while all that happens (about $9,000 on a typical payment). Net lands around $352,000, fifteen grand over our number, in exchange for four months of showings and fall-through risk. Some sellers take that trade every time, and they're right to. Others look at the gap, look at their calendar, and take the certain version. Both answers are rational; what matters is doing this arithmetic with real numbers instead of vibes. Timelines are the other half of that decision — we broke those down in how fast can you actually sell.

Questions that expose a bad buyer in five minutes

Ask these of anyone who makes you an offer, us included. Can I see the comps behind your ARV? Can I see the repair estimate line by line? Is your number final after the walkthrough, or subject to inspection? How long is your inspection period? Who holds the earnest money, and is it non-refundable after contingencies? A buyer who answers all five without squirming is probably safe to deal with. A buyer who gets vague on two or more is planning to renegotiate on day twelve.

FAQ

What percentage of market value do cash buyers pay in Sacramento?

For houses needing real work, offers typically land between 65% and 80% of after-repair value depending on repair scale and market temperature. For light-work houses the percentage runs higher because the repair term shrinks.

Is the first offer negotiable?

Ours moves when a seller shows us something that changes the math — a newer roof we mis-aged, a comp we missed. It doesn't move on pure haggling, because the number wasn't padded to begin with. Any buyer whose price drops $30,000 under pressure told you what their first number was worth.

Do you charge fees or commissions?

No. The offer is the net number: no commission, no fees, and we cover standard closing costs. The offer form takes two minutes and the number arrives within 24 hours.