Your cash offer is the home’s after-repair value minus repair costs, minus selling costs, minus our profit. That’s the whole formula, and unlike a lot of cash buyers, we’ll walk you through every piece of it with real numbers so you can see exactly where your offer comes from. No black box.
Here’s the equation:
Your Offer = After-Repair Value − Repair Cost − Selling Cost − Our Profit
Let me take each piece in order, then run a real Huntsville house through it.
After-Repair Value (ARV)
This is what your house would sell for fully renovated, on the open market, in your neighborhood. We figure it out the same way an appraiser would—by looking at recent comparable sales nearby, then adjusting for square footage, bedrooms and baths, lot size, location, and current market conditions.
Important: ARV is the fixed-up value, not what the house is worth today in its current condition. That distinction is where the rest of the math comes from.
Repair Cost
This is what it actually costs to bring the house to that renovated condition—materials, labor, permits, and the time to manage the work. In Huntsville that often means some combination of foundation, HVAC, roof, electrical or plumbing (especially in older homes), plus the cosmetic work that makes a house sell. We base these on real contractor estimates, not guesses, which is why our offers tend to hold up instead of getting renegotiated later.
Rough Huntsville ranges we see:
- Foundation repair: $15,000–$50,000
- New HVAC: $6,000–$12,000
- Roof replacement: $8,000–$15,000
- Kitchen remodel: $15,000–$30,000
- Bathroom updates: $5,000–$12,000 each
- Flooring throughout: $8,000–$15,000
- Electrical updates: $3,000–$15,000
- Plumbing: $2,000–$10,000
Selling Cost
People forget this one, but it’s real. After we renovate, we have to sell the house—and that costs money: agent commission when we resell, closing costs on both ends, and holding costs (taxes, insurance, utilities) for the months we own it. It works out to roughly 10% of ARV.
Our Profit
We’re a business, so there’s a margin built in—generally 20% of ARV, or 75% of the repair cost on heavy projects, whichever is greater. Heavier repairs carry more risk and more ways for the budget to blow up, so those projects need a bigger margin to make sense. On a light-repair house, the 20%-of-ARV figure usually governs.
A real worked example: a Jones Valley home
Take a 1,500 sq ft Jones Valley house with foundation issues and some other dated systems.
- ARV (fully repaired): $230,000
- Repair cost: −$75,500 (foundation, HVAC, kitchen, baths, flooring, paint)
- Selling cost (≈10%): −$23,000
- Our profit (greater of 20% of ARV or 75% of repairs): −$56,625
- = Your cash offer: about $75,000 (we’d likely round to $75,000)
That number looks like a big discount off $230,000 until you remember the $230,000 only exists after someone spends $75,500 fixing the house and another ~$23,000 selling it—and waits months to do it. The offer reflects the house as it sits today, with all of that work and risk still ahead.
Want to estimate your own?
You can run your own numbers through our sample cash offer calculator. Plug in what you think the fixed-up value is and your best guess at repairs—it’ll show you a ballpark using the same formula above. It’s only an estimate; the real number comes after we see the property in person.
Why our offers don’t get renegotiated later
One thing worth calling out: because we base repair costs on real local contractor estimates, our offers tend to hold. Some buyers make a high offer to win the deal, then “discover” problems during due diligence and chop the price right before closing. We’d rather give you an accurate number up front and stand behind it. David runs our renovation side and evaluates the work himself, so the repair figure in your offer reflects what the job actually costs in this market.
Frequently asked questions
Why is the offer so much lower than what the house will be worth fixed up?
Because the fixed-up value only exists after someone spends the repair money, pays the selling costs, and waits months to do it. The offer reflects the house as it sits today, with all that work and risk still ahead. The “discount” is really the cost of the repairs, the selling expenses, and the risk you’d otherwise carry yourself.
Can I see how you got the ARV?
Yes. We’ll show you the comparable sales we used. It’s the same approach an appraiser takes.
What if I disagree with your repair estimate?
Tell us. If you’ve got a contractor bid that differs, we’ll look at it. The number isn’t meant to be a mystery—it’s meant to be defensible.
Does the formula change for a house in good condition?
The formula’s the same, but a house needing little work has a small repair figure, so the offer lands much closer to market value. That’s also the scenario where listing often beats us—and we’ll say so.
You can run your own numbers through our sample cash offer calculator anytime. And if your house is in good shape, we buy houses across Huntsville but we’ll give you an honest read on whether listing nets you more—see how the whole process works.
Want a real number on your specific house? Call (256) 795-3014—no obligation.