Why cash offers come in below list price
A cash buyer takes on costs and risk that a retail buyer does not. A typical offer accounts for:
- Repairs and updates needed before the home can be resold or rented
- Holding costs during the project: taxes, insurance, utilities, and financing
- Resale costs, including agent commissions and closing costs on the next sale
- Market risk if prices soften before the home is resold
- Profit, which is how the buyer stays in business
The 70% rule, explained
Many investors start with a simple formula:
Maximum offer = (after-repair value × 70%) − estimated repairs
Example: a home worth $350,000 after renovation that needs $40,000 of work → $350,000 × 0.70 = $245,000 − $40,000 = $205,000.
The formula is a screening tool, not a law. HomeLight notes it is unreliable as an exact percentage because every property and market is different.
| Buyer type | Typical range | What drives the number |
|---|---|---|
| Fix-and-flip investor | Roughly 50%–75% of after-repair value | Repair scope, resale risk, profit |
| Buy-and-hold landlord | Varies | Expected rent versus price |
| Instant-offer company (iBuyer) | Up to about 95% of market value, before service fees | Homes in good condition in markets they serve |
Compare the net, not the headline
A cash offer can look low next to a list price, but a traditional sale has its own costs:
- Commissions: Clever Real Estate's August 2026 agent survey puts the average total at about 5.46%.
- Time on market: the national median was 61 days in September 2026 (Realtor.com), plus the time it takes a financed buyer to close.
- Price cuts: 20.8% of listings had a price reduction that month.
- Repairs and concessions requested after the buyer's inspection.
Put both options side by side and compare the cash you walk away with, the date you get it, and how certain each path is.
Six questions to ask every cash buyer
- Is this a firm price, or an estimate that can change after an inspection?
- Who pays closing costs, title fees, and transfer taxes?
- Can you show proof of funds?
- Will you close yourself, or might you assign the contract to another buyer?
- What are the earliest and latest closing dates?
- Is there an inspection period, and what happens if you walk away?
Any reputable buyer will answer all six in writing.
How Speti approaches it
A discounted cash price is not the only way to sell. With Speti you can compare three paths: Cash Fast (an as-is cash sale), Cash Plus (the home is prepared and marketed first, for more potential proceeds), and Flex (terms that can keep existing financing in place or pay you over time). Every offer is reviewed by a person, and there is no obligation to accept.
Frequently asked questions
Are cash home buyers legitimate?
Many are. Confirm proof of funds, a written purchase agreement, a licensed title or escrow company, and no upfront fees charged to you.
Do cash buyers pay closing costs?
Often, but not always. Check the purchase agreement for exactly which costs each side pays.
How fast can a cash sale close?
Usually as soon as title work is complete and both sides are ready. Ask for a written closing window.
Sources
- HomeLight, "How Much Do House Buying Companies Pay?" — https://www.homelight.com/blog/how-much-do-house-buying-companies-pay/
- Clever Real Estate, Average Real Estate Commission Rates: 2026 Survey — https://listwithclever.com/average-real-estate-commission/
- Realtor.com September 2026 Housing Report — https://www.prnewswire.com/news-releases/price-cuts-reach-yearly-high-as-inventory-nears-pre-pandemic-levels-realtorcom-september-housing-report-302893453.html