Most cash-offer companies treat their pricing like a state secret, which is exactly why sellers don't trust them. There's no secret. There are five lines of arithmetic, and you're entitled to see all five.
Every legitimate cash offer starts with what the house will be worth after it's fixed — the after-repair value, built from recent closed sales of renovated homes in your immediate area. Not the county appraisal, not a website estimate: closed sales. From that number, the buyer subtracts four things: the repair budget, the costs of reselling (commissions, title, buyer concessions — roughly eight percent), the costs of holding it for the months the project takes (taxes, insurance, utilities, cost of money), and their profit for taking the risk. Whatever remains is the offer.
Take a 1970s three-bedroom in east Dallas. Renovated comps on nearby streets close around three hundred thousand dollars. It needs fifty-five thousand in work — roof, HVAC, kitchen, floors, paint.
| Line | Amount |
|---|---|
| After-repair value | $300,000 |
| Repairs | −$55,000 |
| Costs to resell (~8%) | −$24,000 |
| Holding costs (~6 months) | −$9,000 |
| Buyer's profit | −$35,000 |
| Cash offer | $177,000 |
Read it in words: the finished house sells for three hundred; it costs fifty-five to fix, twenty-four to resell, and nine to hold; the buyer needs thirty-five for taking on a six-month construction project that might go sideways. What's left — one hundred seventy-seven thousand — is what the house in its current condition is genuinely worth to a professional. Every line is checkable. That's the test of a real offer: ask to see the lines. A buyer who won't show them is hoping you don't ask.
Two honest buyers can land ten thousand apart: one has a cheaper crew, one already owns three projects on your side of town and prices the fourth aggressively. That's normal. What's not normal: an offer that arrives before anyone saw the house, drops sharply after "inspection," or comes from someone who won't put the breakdown in writing. Renegotiation-after-contract is the oldest trick in this business — it's a reason Texas wrote a disclosure statute for wholesalers.
Against that one seventy-seven, weigh the retail path: list the house as-is and maybe a retail buyer pays two ten — then their inspector finds the same fifty-five thousand dollar list and the renegotiation starts, with sixty days of showings, financing risk, and commissions still to come. Sometimes retail still wins; when the house only needs paint and patience, it usually does. The right answer depends on the house and the clock, which is why you want both numbers from someone licensed to give you both.
Get a written offer with the math shown — ARV, repairs, all of it.
Five lines: after-repair value built from closed sales of renovated comps, minus the repair budget, minus resale costs of roughly eight percent, minus holding costs for the project months, minus the buyer's profit. Whatever remains is the offer — and every line is checkable.
Different crews, different holding costs, different appetite — two honest buyers can land ten thousand dollars apart. The red flags are different: an offer made sight-unseen, a sharp drop after "inspection," or a buyer who won't put the breakdown in writing.
It depends on the house and the clock. A house that needs only paint and patience usually nets more listed. A house with a serious repair list or a hard deadline often does better with a firm as-is number. Get both numbers side by side from someone licensed to give you both.
This article is general information for Texas property owners, not legal, tax, or financial advice. Laws change and facts matter — consult your own attorney, CPA, or advisor about your situation. Any offer examples are illustrations, not commitments.
