Quick answer: Most cash home buyers pay between 70% and 85% of what the house will be worth after repairs — its after-repair value, or ARV — minus the cost of those repairs. On a Rio Grande Valley house worth $180,000 fixed up and needing $25,000 in work, that usually means an offer between about $101,000 and $128,000, with no agent commissions, no repairs out of your pocket, and a closing in days instead of months. Below is the exact formula, so you can check any buyer’s math — including ours.
The formula cash buyers use
Almost every serious cash buyer starts from the same equation:
Offer = (After-repair value × a percentage) − repair costs
- After-repair value (ARV): what the house would sell for fully fixed up, based on recent sales of similar homes nearby.
- The percentage: usually 70% to 85%. Lower for houses needing major work or in slow areas, higher for houses in good shape and strong neighborhoods.
- Repair costs: what it will actually cost to get the house to that fixed-up value — roof, AC, foundation, kitchen, cosmetics, all of it.
The leftover percentage is not pure profit. Out of it the buyer pays holding costs (taxes, insurance, utilities while the house sits), selling costs when they resell (including agent commissions), financing costs, and a margin for the risk that repairs cost more than expected — which they usually do.
Where the “70% rule” comes from
The 70% rule is the classic house-flipper shortcut: pay no more than 70% of the ARV, minus repairs. It comes from a time when money was more expensive and it builds in a wide safety margin. It is a starting point for fixer-uppers, not a law. Houses in good condition, in strong Valley neighborhoods like north McAllen or Edinburg, routinely get offers above it. Houses with foundation problems, title issues, or in slow-selling areas get offers below it. When a buyer quotes you a number, ask them to show you their ARV, their percentage, and their repair estimate. A real buyer can. A lowballer will change the subject.
Worked example 1: a McAllen house that needs work
- After-repair value: $180,000 (fixed-up homes nearby sell around there)
- Repairs needed: $25,000 (roof work, AC, flooring, paint)
- At 70%: ($180,000 × 0.70) − $25,000 = $101,000
- At 75%: ($180,000 × 0.75) − $25,000 = $110,000
- At 85%: ($180,000 × 0.85) − $25,000 = $128,000
So a fair cash offer on this house lands roughly between $101,000 and $128,000, depending on how the buyer reads the repairs and the neighborhood. An offer of $70,000 on this house is not “the formula” — it is a lowball. An offer of $160,000 is not real either; that buyer will try to renegotiate later.
Worked example 2: a smaller Harlingen house
- After-repair value: $115,000
- Repairs needed: $12,000
- At 70%: ($115,000 × 0.70) − $12,000 = $68,500
- At 80%: ($115,000 × 0.80) − $12,000 = $80,000
Smaller houses have smaller margins, which is why the percentage matters more than the headline number. Always compare the math, not just the offer.
The honest comparison: cash vs. listing the same house
Take the $180,000 McAllen house above and list it the traditional way instead:
- Sale price: $180,000
- Minus agent commissions (~6%): −$10,800
- Minus repairs to make it listable: −$15,000
- Minus 3 months of mortgage, taxes, and insurance while it sells: −$3,600
- Minus closing costs and buyer concessions: −$3,000
- Net: roughly $147,600 — in 60 to 90+ days, if it sells
Listing nets more on paper. That is the truth, and any buyer who denies it is not being straight with you. The cash offer of ~$110,000 buys you the other things: no repairs, no showings, no financing falling through at the last minute, no months of payments, and a closing date you can plan your life around. For a house in great shape with time to spare, listing usually wins. For a house that needs work, a timeline that is closing in, or a situation like foreclosure, probate, or back taxes, cash is often the cheaper option once everything is counted.
What makes one offer higher than another
- Condition. Every repair comes straight off the offer. A clean, updated house gets a higher percentage and a smaller repair deduction.
- Location. Houses in areas with strong buyer demand — near good schools, in growing parts of McAllen, Edinburg, and Mission — get stronger offers.
- Title and liens. Back taxes, liens, and heirship problems do not kill an offer, but clearing them costs time and money that buyers factor in.
- Occupancy. A vacant house is simpler than one with tenants who may not leave.
- Your timeline. A seller who can give a buyer a flexible closing date sometimes gets a better number than one who needs to close in seven days.
How to compare two cash offers
Do not compare headline numbers. Compare these five things: the net amount you walk away with, who pays closing costs, any fees deducted from the offer, the earnest money the buyer puts down (a serious buyer puts real money down), and whether they can show proof of funds. Then ask each buyer to walk you through their ARV and repair numbers. The buyer whose math you can follow is usually the buyer whose closing you can trust.
How Sunbelt Cash Offer prices a house
We run the same formula above, and we will show you the numbers. Tell us about the house, we look at what similar fixed-up homes near you actually sold for, we estimate repairs honestly, and you get a cash offer within 24 hours — free, with no obligation and no fees taken out of it. We close in as little as 7–10 days through a local title company, and we pay the standard closing costs.
Call or text (956) 884-4441 — ask us to walk you through the math on your house. If listing makes you more, we will tell you that too.
Frequently Asked Questions
Do cash home buyers lowball?
Some do. That is exactly why the formula matters: if a buyer cannot show you their after-repair value and repair estimate, their number is just a number. Ask for the math.
Can I negotiate a cash offer?
Yes. If you have a higher written offer, or if a repair estimate looks inflated, say so. Legitimate buyers will explain their numbers and sometimes adjust them.
Is a cash offer free?
Ours is. Getting a cash offer from Sunbelt costs nothing and commits you to nothing.
Why do two buyers offer different amounts for the same house?
Because they estimate repairs differently, use different percentages, and work with different margins and resale plans. This is normal — and it is why getting two or three offers is smart.
Does the 70% rule apply to every house?
No. It is a starting point for houses that need significant work. A move-in-ready house in a strong neighborhood should get a much higher percentage of its value — and if a buyer quotes you 70% on a house that needs nothing, get another offer.