Process and costs
How Cash Home Buyers Determine Offers
An offer from a direct buyer is not a guess and it is not a formula pulled from thin air. It comes from four inputs, and any buyer worth working with will walk you through all of them.
The four inputs
First, what the property is worth once it is repaired and ready for a retail buyer, based on recent comparable sales in the immediate area, not the whole city.
Second, the cost of the work required to get it there. Third, the carrying costs during that work: taxes, insurance, utilities, financing. Fourth, the margin the buyer needs to justify taking on the project and its risk.
What moves the number most
Location and comparable sales set the ceiling. Condition and repair scope determine how far below that ceiling the offer lands.
- Structural, roof and mechanical condition
- Water damage and its history
- Occupancy status and any leases
- Open permits or code violations
- Local demand for the finished property
Questions worth asking any buyer
Ask how they arrived at the number, which comparable sales they used, what closing costs you will be responsible for, and whether the offer can change after an inspection.
Also ask whether you are free to decline. A legitimate offer carries no obligation, and pressure to sign on the spot is a signal to slow down.
This guide is general information about selling property in Illinois, not legal, tax or financial advice. Every situation differs, so confirm the specifics with a licensed attorney or tax professional before you act.