What Is a Fair Cash Offer for Your Home?

When you are considering selling your home, part of the process is to determine the fair cash value for your home. You need to do this whether you are selling your house yourself, through a real estate agent, or to a real estate investor. 

You need to know the fair cash value of your home because you could attract cash buyers. These home buyers typically make cash purchases for a cash deal. In other words, they have the cash to buy your home now, so you do not have to wait for financing or for the buyer to get pre-approved. Best of all, you are able to have a faster closing process—typically, within seven days of accepting a cash offer from an interested buyer. 

Step #1: Schedule a home inspection and home appraisal.

The first thing you want to do is have your home inspected and appraised. The inspection lets you know any repairs or maintenance that need to be completed. The appraisal lets you know the fair market value for your home. 

The appraiser will typically give you two amounts—one if you complete any of the repairs or maintenance they pointed out and a second price if you do not plan on making any repairs or maintenance. 

Step #2: Use the 70% rule to get a starting value for a fair cash offer.

Once you know the fair market value of your home, your next step is to use that amount and multiply it by 70% to get a starting fair cash offer amount. The 70% rule is used when selling your house for cash.

You need to multiply each fair market value by 70% to know the fair cash offer price for selling your home “as-is” and if you complete repairs and maintenance. 

Step #3: Determine if making repairs and maintenance is worth it.

Once you have your starting fair cash offer value, your next step is to decide if you should invest in repairs and maintenance. As a general rule, if repairs and maintenance cost more than your fair cash value, then they are not worth making. 

Pros and Cons for Fair Cash Offers

Now that you know how to find out the fair cash offer value for your home, you need to weigh the pros and cons when you get a cash offer on your house. 

Pros

• You do not have to wait for the buyer to be approved for a mortgage and the mortgage payment to close.
• You will not have to worry about lender requirements that could delay closing or even cause it to fall through.
• You can sell your home “as-is.”
• You have more flexibility in selling the home.
• You only need proof of funds from the buyer when they pay cash.
• Less paperwork and documentation are needed at closing.
• Closing costs will be much less.
• You can close on a date of your choosing.
• You do not need a real estate agent.

Cons

• You will not get the fair market value for your home.
• Your mortgage company may not allow you to accept a fair cash offer for less than your mortgage payoff amount unless you can cover the difference.

What Is a Reasonable Fair Cash Offer?

When someone is buying a house and paying cash, they may low-ball you well below the 70% rule. It is crucial that you understand how real estate investors arrive at offer prices for cash deals. 

If you are selling your home “as-is,” the investor will need to recoup their repair and maintenance costs. If that exceeds the 30% difference, they will most likely offer you less because they still want to earn a small profit after they flip the home. 

On the other hand, if your home is in excellent condition and does not need any repairs or maintenance, you will want to negotiate for a higher cash offer price on the house—anywhere from 10% to 20% of the fair market value. This still allows the investor to flip the home at a profit. 

Final Thoughts on Fair Cash Offers 

Ultimately, you need to manage your expectations when it comes to fair cash offers. You also need to take into consideration the pros and cons of selling your house for cash.

Are you thinking about selling your home in Los Angeles, Orange County, Riverside, San Bernardino, San Diego, or elsewhere in California? Get a no-obligation fair cash offer on your home from a local real estate investor by using 800CashToday.

If you use our service to sell your home, you also receive the following perks:

• Free Credit Repair
• Free Local Moving
• Cash Advance up to $10,000
• Fast 7-Day Sale and Closing
• Flexible Moving Date
• Easy and Simple Selling Process

To get started, submit details about your home online or contact us at 1-800-CASH-TODAY for further assistance.