Cash Offer Calculator — How We Determine Your Home’s Value
You deserve a clear answer to the question, “How do cash home buyers calculate offers?” At Orca Homes, we keep the process simple, fair, and transparent. Our cash offer calculator is designed to show you exactly how we determine the value of your home, step by step. No gimmicks, no hidden margins, just an honest explanation so you can make a confident decision about selling your property.
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Our Step-by-Step Process
Here’s how we personally calculate your cash offer:
- Property Assessment: We visit your property to assess its condition and understand the scope of any necessary repairs or renovations.
- Cost Estimation: We carefully estimate the cost of all repairs, including materials, labor, and permits, keeping in mind the duration of the project as well
- Project Value Calculation (ARV): We determine the potential After-Repair Value (ARV) of your property after all repairs are completed. This involves researching comparable sales in your area and considering factors like location, size, features, along with the projected sell date
- Carrying Costs (5-10% of ARV): We factor in the costs associated with holding the property during the renovation and sale process. This includes financing (hard money loans), property taxes, insurance, and utilities
- Selling Costs (8% of ARV): We factor in the costs required to sell the home on the open market. This includes real estate agent commissions, tax, title and escrow charges, staging, and photography.
- Profit Margin (8% of ARV): Orca Homes typically includes a profit margin of 8% of the expected after-repair value. This accounts for the time, risk, and capital invested in every project.
- Offer Calculation: Finally, we subtract the estimated repair costs, financing costs, and profit margin from the projected after-repair value to arrive at your cash offer.
Transparency is Key
We believe in being upfront about our process. Every homeowner we work with knows exactly how we calculate our offers. We’re happy to answer any questions you have and walk you through the details.
A Real Life Example (Using $500,000 ARV)
Recently, we worked with a homeowner in Federal Way whose house required major updates, including an $80,000 remodel. After our assessment, we estimated the After-Repair Value to be $500,000. Here’s how we calculated our offer.
- After Repair Value: $500,000 The estimated value after all renovations are complete.
- Estimated Repair Costs: $80,000 (including full cosmetic remodel, window replacement, bathroom updates, HVAC, new roof, labor, and permits)
- Carrying Costs (7%): $35,000: Financing, taxes, insurance, and utilities during the project duration.
- Selling Costs (8%): $40,000 - Real estate agent commissions, title fees, staging, and photography.
- Desired Profit (8%): $40,000 - Risk adjusted profit margin for the project
- Total Project Costs $195,000 Sum of all costs and desired profit
Calculation
Purchase Price = ARV – (Repair Costs + Carrying Costs + Selling Costs + Desired Profit)
$500,000 (ARV) – $195,000 (Total Costs) = $305,000 (Our Cash Offer)
Ready for a Fair, Transparent Offer?
Contact us today for a cash offer. We’re here to help you make the best decision for your situation.
Cash Offer Calculator FAQs
How accurate is a cash offer calculator?
A cash offer calculator gives you a strong estimate based on property value, repairs, and market trends. While it’s not the same as a professional appraisal, it provides a clear, transparent breakdown of how we calculate your cash offer.
Do I need to make repairs before getting a cash offer?
No. At Orca Homes, we buy houses as-is. You don’t need to fix, update, or even clean before we make an offer.
Will using a cash offer calculator cost me anything?
Not at all. Our calculator and evaluations are 100% free, with no obligation to sell.
What factors impact the cash offer on my home?
We consider the property’s condition, repair costs, recent sales in your area, and the after-repair value. We also factor in holding and selling costs, along with a modest profit margin, to arrive at a fair number.