One of the most common frustrations homeowners have with cash buyers is opacity. An offer arrives — maybe $180,000 — and there's no explanation for how that number was reached. You don't know if it's fair, and the buyer won't tell you.
We operate differently. AJ walks through the numbers with every seller. Here's the methodology.
Step 1: After-repair value (ARV)
We start with what the home would sell for on the open market if it were in fully renovated condition. This is based on recent comparable sales (comps) in your neighborhood — homes of similar size, age, and layout that sold in the last 3–6 months.
Step 2: Repair and update costs
We estimate what it would cost to bring the property to that renovated condition — deferred maintenance, cosmetic updates, and any systems work (roof, HVAC, plumbing, electrical).
We're transparent about this estimate. If we think the roof needs $12,000 in work and the kitchen needs $20,000, we'll tell you and show you our logic.
Step 3: Our margin and holding costs
We need to make a profit to stay in business — that's not a secret. Our margin accounts for:
- Renovation costs (Step 2)
- Holding costs while we renovate (taxes, insurance, utilities)
- Agent commissions when we resell (5–6%)
- Closing costs on both the purchase and the resale
- Our profit for the risk we take
The formula
In rough terms: Our offer = ARV × 70% − Repair costs. The 70% accounts for our margin and all carrying/closing costs. This is the standard method in the cash buying industry.
If a home would sell for $200,000 renovated and needs $30,000 in repairs, a fair offer is around $110,000. Some sellers look at that and say 'that's too low' — and for them, listing makes more sense. But the number isn't arbitrary, and we're happy to explain every line of it.
We will always show you our full analysis. If you think our repair estimate is off, tell us — sometimes we adjust, and sometimes we explain why we see it differently.
What we won't do
We won't lowball you to negotiate up. We won't give you a high number and then reduce it at closing. We won't use high-pressure tactics. The number we give you is the number we intend to close at.
AJ Vermiglio
Co-Founder, Home Closing Pros — Milwaukee, WI