How do “Cash House Buyers” come up with their Cash Offer?

How do “Cash House Buyers” come up with their Cash Offer?

Hello, my name is Sam Colon, and I am making this blog to hopefully clears things up for. Totally understand that selling a house is a big deal and choosing the right company to service your real estate needs is important. However, time and time again, people call our office or they fill out a form and then when we call them back, they ask the same question.

So how does this work? How do you guys come up with your cash offer? Are you guys just low balling homeowners? Are you just trying to take peoples houses for pennies on the dollar? We get commentaries like this and we don’t take offense to it because when something is done to several people over and over again, it becomes a thing where now people believe that to be true.

But, the truth is that you are not sure how it works and because of that your survival instinct kicks in and you guards are up, looking out for that worst case scenario. And I TOTALLY UNDERSTAND!

By sharing this blog, I want to clarify that real estate investors, particularly cash home buyers, use a formula and that formula is used for every property. We don’t just pull offers out of the air. We use comparable sold houses in the area that that are very similar to the house you are planning on selling to us.

We actually have a video that breaks it down to the “T” on how we use this formula to come up with our cash offer for you house.

This will clarify a lot of things for people looking to sell their house to a cash buyer. This way even if you don’t use We Buy NJ Real Estate, and you decide to use another company. Or maybe you’re not in New Jersey and you’re in New York or you’re in another state. Typically this is a formula used when making these offers and it’ll help you to make a educated decision in identifying an actual reputable company.

If you ask them, how do you come up with your offers and they can’t break down this formula to you, don’t do business with them. Find another company that can and use this in your back pocket when vetting them. Don’t let ’em know that you know how they come up with their offers and see what they provide you. See what type of information they provide you and if they do provide you this information, then I don’t want to say they’re a legit company, ’cause of course, you have to do your homework on them, but I want to say they’re off to a good start.

Watch the video it will break down specifically on how cash house buyers come up with their offer.

So you want to sell your house fast… Then you’re probably wondering how it all works.

First let me introduce our company to you We Buy NJ Real Estate, we buy houses throughout New Jersey. We’ve been in business since 2003, and we are accredited members of the Better Business Bureau with an A+ rating. If you know anything about the BBB it is very difficult to have and maintain a A+ rating. Next, I will explain the four easy steps to the process.

Step #1 – We come out and view the property

Step #2- We then agree on a price and get under contract

Step #3- We wait for title report to arrive and then we schedule a closing and

Step #4 – Last but not least we close in two to three weeks and you get paid.

Now one of our frequently asked questions is what makes you different than working with the realtor?

While, we are licensed Realtors we are also investors and cash buyers looking to purchase your house. There are some big differences between dealing with the realtor and dealing with us.

When working with a realtor you often have to make repairs before selling when working with us we buy strictly in as is condition. When working with a realtor it often takes six months to sell your property.

When working with us we can close in two to three weeks. working with a realtor you have to show your property multiple times before you get an interested party.

Working with us you show your house, one time! Working with realtor contracts, often times they are full of contingencies working with us no contingencies, we buy as-is.

Working with a realtor, the sale price can be lowered based on a buyer’s inspection there are times where after the buyer inspection the buyer wants you to credit them in order to make necessary repairs. With us, we offer you a price and we guarantee that is the price we will close on.

With the realtor the sell is based upon a successful appraisal home inspection and mortgage approval. With us, we rely on none of these to buy your house. We buy as-is, with the realtor you can end up paying thousands to a realtor in commission. With us, there are no fees commission, in fact, we even pay for your closing costs.

Another frequently asked question is how do you guys come up with an offer to buy my house. Well, there’s a simple formula that investors like us often use.

That is ARV(After Repair Value) – 30% – Repair Cost= our MAO (Maximum Allowable Offer).

First, we find our ARV, in order to do that we locate three (3) of the most recently sold similar houses in the area that matches your house . Then we come up with an average in this example the average value of the houses in your area  is $300,000, so lets consider this to be the ARV. This is the property’s value after we make all of the necessary repairs.

Next, we take the ARV and we subtract 30%, why 30% you may ask? Well here’s why,  5%-6% is out for realtor commissions, because after we repair the house we list it back on the market and we pay the realtor a 5%-6% Commission. next, we deduct 5% for closing costs. These closing costs include title insurance, property insurance, Attorney fees, and etc. Next, we deduct 10% for Holding Cost this holding cost consists of interest fees, water bill, the electric bill, heating and cooling bill, taxes and etc. Lastly we take out 10% for our profit. I’m sure you will agree that with all the money and time being invested, that 10% is a reasonable return on investment for someone willing to invest $210,000.

What we would do now is subtract the cost of repairs to bring the property to the full potential, in this case, it would be $60,000.

Now let’s bring it all together… ARV $300,000 then we subtract out 30% then we subtract the cost of repairs, giving us a MAO (our maximum allowable offer) of $150,000.

I hope this helped you understand how we come up with our offer to buy your house now here we have a few selloff testimonials which we have videos -on our website.

The first Testimonial is Kathleen from Westfield, New Jersey “I really enjoyed it and I would highly recommend their services”

Next, we have Stan from Kenilworth New Jersey “they were like brothers to me during this whole process”

The reason those seller testimonials are important is to show you that we are the real deal.

Let us help you, hopefully by now you are convinced that we offer the best service in the industry. We pride ourselves with following through with what we promise, and delivering  the best service in the industry.

Give us a call at 908-320 7995, you won’t regret it.

I hope it’s helpful and if you are looking to sell your property, please feel free to give us a call. We’ll set up an appointment.

After we set up that appointment, we’ll go confirm the repairs on the property and if it makes sense to both of us, we’ll move forward from there, you will not be disappointed.

You can go to our website. It’s and you’ll see those testimonials in video. Those are real people speaking from the heart for what we did for them. Take a look and I hope this video is helpful.

Have a great day. God Bless. Talk to you soon!

Video Transcription

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