If you’ve asked a few Redding cash buyers for an offer, you’ve probably noticed the numbers can be all over the place. One company comes in low, another won’t tell you how they got their number, and a postcard promises “top dollar” without ever seeing the house. I’ve been selling homes in Redding since 2006, and I buy houses for cash too, so I want to show you exactly how a cash offer gets built. Once you know the math, you can judge any offer on your own.
Step 1: What the house is worth after repairs
Every cash offer starts with the after-repair value, often called the ARV. That’s what your house would sell for on the open market once it’s fixed up and move-in ready. A fair buyer gets that number from recent comparable sales nearby: similar size, age, lot, and neighborhood, sold in the last few months.
This is where a lot of offers go wrong. A home in west Redding doesn’t compare to one in Enterprise, and a place on an acre in Palo Cedro doesn’t compare to a city lot. If a buyer won’t show you the comps they used, ask. If they still won’t, that tells you something.
Step 2: What it will cost to fix
Next comes the repair estimate: roof, HVAC, plumbing, electrical, foundation, plus the cosmetic work like paint, flooring, kitchens, and baths. In Shasta County it also pays to think about things like a tired septic system, an old well, wildfire defensible-space work, or unpermitted additions.
A good estimate comes from walking the property, not guessing from photos. Some buyers pad this number to make a low offer look reasonable, so it’s fair to ask for the line items.
Step 3: The costs of holding and reselling
The buyer has to own the house while the work gets done. That means property taxes, insurance, utilities, and the cost of the money tied up in the project. Then there are closing costs on both the purchase and the resale, plus agent commissions when they sell it again. These costs are real, and they come out of the offer.
Step 4: Profit and risk
Finally, the buyer keeps a margin. That covers their profit and the risk that the repairs cost more than expected, the market softens, or the project runs long. This is the part most buyers don’t talk about, but it’s part of every cash offer, mine included.
An example of the math
Here’s an example with round numbers, just to show how it works. It isn’t a quote for any real house.
| Line item | Amount |
|---|---|
| After-repair value | $380,000 |
| Repairs | −$35,000 |
| Closing and resale costs (about 8%) | −$30,400 |
| Holding costs (about 4 months) | −$9,600 |
| Profit and risk margin (about 12%) | −$45,600 |
| Cash offer | about $259,400 |
You may have heard of the “70% rule,” where a buyer takes 70% of the after-repair value and subtracts repairs. It’s a quick shortcut, and this example lands close to it. But a shortcut isn’t an explanation. You deserve to see each line.
Why a cash offer can still make sense
Looking at that table, you might wonder why anyone sells for cash. The answer is that the cash number isn’t the only cost you’re weighing. If you list a house that needs work, you may be paying for repairs up front, covering the mortgage, taxes, and utilities while it sits, handling showings, and hoping a buyer’s loan and inspection don’t fall apart. For an inherited house, a rental with problem tenants, or a home you’re behind on, speed and certainty can be worth more than the last dollar.
And sometimes it isn’t worth it. If your house is in good shape and you have a little time, listing it will usually put more money in your pocket.
Cash or list: I’ll show you both
Because I’m a licensed agent (CalDRE 01782607, broker/owner of Upward Realty) and a cash buyer, I don’t have to push you one way. When you ask me for an offer, I’ll show you my cash number with the math behind it, and next to it what I think you’d net if we listed the house on the market. You pick the one that fits your situation. You can see how that side-by-side works on my compare page, or read more about how I buy houses.
Get your numbers
If you’ve got a house in Redding, Anderson, Shasta Lake, Cottonwood, Palo Cedro, Bella Vista, Red Bluff, or Shingletown, I’m happy to run the numbers with you. There’s no obligation and no pressure.
Get your cash offer here, or call or text me at (530) 351-5555.