Most cash investors base their offers on your home’s after-repair value (ARV), typically offering about 70% of what they expect to sell it for after renovations. However, the more work your home needs, the lower an investor's offer will likely be.
Selling to an investor may make financial sense if you're behind on payments or your home needs major repairs. It can also be a convenient way to sell an inherited property before maintenance and utility bills start to add up. Investors purchase homes in just about any condition and can close quickly.
That said, investors aim to buy low in order to sell at a profit after making repairs. So before selling to an investor, it's wise to:
- Have a good idea of what your home is really worth. A good realtor — preferably from a brokerage charging a competitive commission rate — is usually happy to pull comps showing what your home is worth based on recent sales of similar homes in your area.
- Get multiple offers to compare prices and terms. Not all investors are the same. Some may waive inspections or close faster, while others may offer a higher price but include fees or conditions.
- Weigh the trade-offs. Ask yourself how much speed and convenience are worth — and whether you’re okay sacrificing some equity for a faster sale. According to Redfin data, the typical home bought by an investor sells for 58% more than the investor originally bought it for.[1]
A free offers marketplace like Clever Offers can help you compare multiple offers quickly. They can also give you a professional estimate of your home value, so you know exactly how much money you're leaving on the table. You may find that an investor's offer is worth it, or decide that listing is the way to go. Fill out a quick form to see what offers you qualify for, and sell in as little as 7 days for the highest cash price.
How much do investors pay for houses?
This calculator estimates how much a real estate investor might offer for your house based on the 70% rule. However, actual offers depend on a variety of factors, including your home’s condition and location, the level of competition in the local market, the buyer's investment strategy, and your urgency to sell.
*Note: This calculator provides estimates based on typical investor criteria. Actual offers may vary based on additional factors such as local market conditions, property specifics, and individual investor preferences.
The 70% rule explained
As a general guideline, investors try to pay no more than 70% of a home's after repair value — it's estimated worth after fixing it up, minus repair costs. According to this 70% rule, if a home could be worth $500,000 after $30,000 in repairs, an investor would offer about $320,000 for it.
However, the actual amount an investor will pay for your home depends on a number of factors:
- Your home's condition and location
- Repairs and holdings costs (mortgage, utilities, taxes, etc.)
- Time it will take to turn a profit
- Complexity and risk (e.g., title issues, code violations, problem tenants)
- Exit strategy (e.g., short-term flip vs. long-term rental with room for appreciation)
- Overall profit potential, including the ability to add value through renovations
- How motivated you are to sell
Investor Efrain Lopez of House Love Treatment Buyers LLC offers the following scenarios as examples of when an investor might adjust their offer lower or higher than the standard 70% ARV.
Scenario 1: When an investor might offer less than 70% ARV
Purchase details
- Location: Cleveland, OH, in a neighborhood undergoing revitalization, but with high vacancy rates and slower appreciation.
- ARV: $200,000
- Repairs: Extensive renovations required, including foundation work, roof replacement, and electrical updates, estimated at $50,000.
- Market conditions: A buyer’s market with slower sales in the area and high vacancy rates. Limited buyer interest for high-priced homes, requiring a longer holding period.
- Exit strategy: Fix-and-flip with a longer holding period to wait for the market to improve or rent it out if the flip doesn’t sell quickly.
- Profit potential: After repairs ($50,000) and selling costs ($20,000), expected profit is about $30,000 (15% ROI).
Risk factors
-
- High risk: The property requires significant repairs and the market is slower, so a more conservative offer is necessary to account for potential holding costs.
-
- Lower profit margin: Given the neighborhood’s current market and the extensive work required, a lower offer helps mitigate the risks involved.
-
- Longer hold time: The longer it takes to sell or rent the property, the higher the associated costs (e.g., utilities, insurance, taxes), so a lower offer protects against these additional costs.
💰Investor's offer price: $100,000 (50% of ARV)
Scenario 2: When an investor might offer more than 70% ARV
Purchase details
- Location: Los Angeles, CA, in a highly desirable, appreciating neighborhood with low inventory and high demand.
- ARV: $1,000,000
- Repairs: Minimal cosmetic upgrades costing $20,000.
- Market conditions: A seller's market with competitive offers. Properties in the area are selling quickly, often at or above ARV.
- Exit strategy: Quick fix-and-flip with a strong buyer pool, ensuring fast turnaround.
- Profit potential: After repairs ($20,000) and selling costs ($50,000), expected net profit is $180,000 (18% ROI).
Risk factors
-
- Controlled risk: Minimal repairs and a competitive market make this a secure investment.
-
- Reasonable profit margin: Maintains a solid ROI while keeping costs manageable.
💰Investor's offer price: $750,000 (75% of ARV)o
Types of investors that buy houses
There are a few different categories of investors that buy houses:
- House flippers
- Wholesalers
- Rental property owners
Each cash buyer has slightly different goals when sizing up a house, which influence their offer price.
While some investors look for homes that can generate a steady monthly income and long-term price appreciation, others look for an opportunity to add immediate value through major upgrades.
| Investment strategy | Ideal offer price | |
| House flippers | Buy low, make repairs, sell for a much higher price | No more than 70–80% of a home's after-repair value, minus repair costs |
| Wholesalers | Find a home at a bargain, sell the contract to another investor for a small profit | No more than 60–70% of a home's after-repair value |
| Rental property owners | Generate steady monthly income and long-term price appreciation | No more than 85% of a home's after repair value or 50x the monthly rental value |
House flippers
House flippers buy distressed homes, fix them up, and resell them for a profit. They make offers based on a property’s anticipated repair costs versus its projected future worth.
House flippers generally aim to pay about 70% of a home's estimated after-repair value (ARV), minus renovation costs.
The exact amount a house flipper pays also depends on the particulars of the deal. For example, some investors prefer to deal in what's called novation agreements — a type of contract that allows them to fix and flip a home on your behalf while you maintain ownership. They handle the renovation and split the proceeds with you at closing, which lowers their all-in costs.
While a typical cash offer might only be 70% of a home's post-renovation value, a novation agreement could net you 80–85% of your home's after-repair price.
Wholesalers
Wholesalers look for homes they can buy at a steep discount for the purpose of selling the contract to another investor for a small profit. Rather than making money off their sweat equity like house flippers do, they make money off the number of purchase contracts that pass through their hands.
Since wholesalers typically sell to other investors — who are also looking for a bargain — they tend to target motivated sellers who need a fast out. Many wholesalers may offer even less than 70% ARV.
"They're essentially a middleman," says rental property investor Mathew Pezon. "They need a steep discount because they own the property temporarily and need to make a cut on the flip."
To ensure you don't get taken advantage of, it's a good idea to know your home's fair market value — either by researching comparable homes in your area or asking a realtor for a comparative market analysis, which they will often provide for free.
Rental property owners
Also called "buy and hold" investors, rental property owners purchase properties with the goal of having a steady monthly income stream. They might pay closer to market value, but it depends on the property's potential for rental income.
"Most of the time we can offer up to 85% of the market value less repairs if our financial analysis checks out," says Pezon, who purchases and improves rental properties in Pennsylvania's Lehigh Valley. "Offering more than other companies is how we've been able to buy so many properties in a competitive market."
Some rental property investors use the 2% rule to price a home. This just means that the monthly income should be 2% of the purchase price (although rising home prices have made that percentage less realistic).
If an investor knows that a house could be rented out for $2,000 each month, then it would make sense for them to offer approximately $100,000 for the house.
What about iBuyers?
Another option for getting a cash offer is to sell your house to an iBuyer like Opendoor. However, iBuyers typically don't buy distressed homes, so this might not be an option if your house needs a lot of work or has complicated title or tenant issues.
If your home does meet an iBuyer's purchase criteria, you'll likely get closer to market value for it than traditional investors pay. And like investors, iBuyers take care of repairs and touchups on a home before they relist it — so you can sell your house as is.
Other advantages of selling to an iBuyer include the ability to choose your own closing date — ranging from a couple of weeks to a couple of months — and handle the transaction almost completely online.
Just be prepared to pay service fees of 5–8% and variable repair costs, which are generally non-negotiable.
What do investors look for when buying a house?
☑️ Condition
While many investors look for an opportunity to add value through home improvements, they want to avoid paying for high-ticket items that don't add a lot of value when fixed up.
"I generally steer clear of properties with significant structural issues or extensive repairs needed," advises Chris McGuire, an investor with more than 20 years of experience in real estate. "The cost and effort required to address these issues can affect potential profits and prolong the investment timeline."
Many investors also steer clear of mobile or manufactured homes, fire damaged homes, or homes needing major electrical, plumbing, or foundation work, notes rental property investor Mathew Pezon.
☑️ Location
Investors often prefer homes in high-demand neighborhoods or growing areas with room for appreciation.
"Location plays a big role," says Colorado real estate investor Brett Johnson. "It should have growth potential, good schools, and easy access to amenities."
Homes in less desirable neighborhoods could be a red flag to an investor.
"Properties located in declining neighborhoods or areas with little market demand may not offer a favorable return on investment, so I also tend to avoid those," says McGuire.
☑️ Opportunity to add value
Investors tend to look for homes they can purchase at a bargain and improve for a profit.
"Doing repairs is how we add value to the home and raise its potential sale price," explains investor Mathew Pezon, who prefers "homes that need moderate cosmetic updates like flooring, paint, kitchens and bathrooms."
However, investors may also see potential in more complex renovations.
"What really gets me excited about an investment property is the potential to add value," says Johnson. "This could mean different things, like finishing a basement or turning two bedrooms into a spacious master suite with its own bathroom."
☑️ Overall profit potential
To determine whether a deal makes sense, investors will weigh their estimated all-in costs against a home's estimated resale or rental value.
"We run the numbers based on comps (the sale prices of similar homes in the neighborhood), repair estimates, and target profit goals," explains investing expert Andrew Lokenauth. "Offers consider total fix up costs, holding costs, and potential resale. Ideal deals make sense at 70–80% of after repair value."
Should you sell your house to an investor?
Pros of selling to an investor
✅ You can sell your house 'as is'
Buyers who need financing may not qualify for a loan to purchase a home in poor condition. But cash investors are able to purchase just about any house, in any condition, even if it needs major updating or repair work.
"Doing repairs is how we add value to the home and raise its potential sale price," suggests Mathew Pezon of Pezon properties.
✅ You can close quickly, for cash
Traditional home sales can drag on for months, especially after you factor in the time to prep, list, and show your home. Experienced investors can usually close on a deal very quickly — sometimes in under two weeks, compared to the 30+ days it takes the typical buyer to get approved for a loan.
Most investors pay cash, which eliminates many of the hold ups that can come with traditional financing. There's also less risk of a deal falling through due to a lending appraisal that falls short of the asking price or a buyer's inability to qualify for a loan.
When you need to sell your house fast, an investor is more likely to deliver.
✅ Your selling costs will be lower
While cash offers often come in below list price, investors typically offer incentives to help sweeten the deal — including paying for closing costs like transfer taxes and title fees.
"I try to provide incentives like covering all closing costs and allowing the sellers time to move out rent-free post-closing," says Bart Waldon, Managing Partner at Land Boss.
Selling directly to an investor also negates the need to hire a real estate agent, which saves the cost of realtor fees. Just be sure to have a professional to look over the contract before signing — either a real estate attorney or an agent willing to offer this service à la carte.
"Many times there can be little to no bottom line difference to the seller for a cash offer vs. an open market sale after paying realtor commissions, longer holding costs, repairs, staging costs, temporary housing, or storage costs," says Pezon.
✅ You have more options in a difficult situation
The typical home buyer might shy away from purchasing a property with liens on the title or a tenant who refuses to vacate. However, these types of issues are generally no problem for investors, suggests Pezon, who notes that the following situations are particularly common in investor deals:
- Delinquent taxes
- Mortgage payment issues
- Tenant issues
- Liens
- Probate/inherited home sales
Cons of selling to an investor
❌ You'll leave some money on the table
Investors offer you cash and the opportunity to close quickly — without making repairs or going through the usual process of selling a house. The trade-off for this convenience is a lower sale price than what you might get listing with an agent (usually about 30% less than its potential market value).
Research published on Twin Cities Probate found that homes sold through the MLS netted sellers an average of $49,000–104,000 more than those sold off-market to an investor. That's after accounting for realtor fees, which average 5–6% of the home sale price.
❌ You have less leverage to name your price
Because the investor is buying the house to make a profit, the math needs to make sense for them. In most cases, they won't have much room for negotiation.
That said, investors may offer slightly more if they know they're competing with other cash buyers. Getting multiple offers is your best insurance against a low sale price.
❌ You'll be on your own during negotiations
Investors are experienced negotiators who have done far more deals than the average home seller. And while most investors are not there to rip you off, some may try to press their advantage — especially if they know you're motivated to sell for financial or personal reasons.
Avoid working with buyers who pressure you into signing a contract. Take the time to think it over and have it reviewed by an adviser, such as a real estate lawyer or CPA.
Not sure a cash home buyer is legit? Look for these red flags.
Most "we buy houses" companies are legitimate businesses, but there may be some bad apples in the bunch. If you work with one of these companies, be sure to vet them thoroughly. Brian Harbour, who has more than 20 years of experience investing in real estate, offers the following scenarios as potential red flags when dealing with an investor.
1. Lack of communication or professionalism
Investors should be transparent, professional, and clear in their communication. Similarly, contracts and letterhead should look professional and contain clear terms.
If the investor is evasive and hard to reach, or their documentation seems off or unprofessional, this can be a sign that they aren't operating legitimately.
2. No proof of funds
If an investor is unable to provide proof of funds, such as a bank statement or pre-approval letter from a lender, this is a serious concern — especially in a cash deal. A legitimate investor should readily provide these documents.
The contract should also specify the amount of money the contractor will put down as a deposit — a minimum of 1% of the purchase price is typical.
3. Pressure or urgency to sign a contract
An investor should never pressure you to make a quick decision, rush into a deal, or close in an unreasonably short timeframe. If an investor is pushing you too hard or making exaggerated promises, proceed with caution.
Review contracts thoroughly — preferably with the help of an attorney or CPA — to ensure you understand the specifics.elf
4. Offers that are too good to be true
If an investor’s offer seems too good to be true, it could be a bait-and-switch tactic — meaning the investor intends to get you under contract with a good price and then lower the offer at the last minute, hoping it will be too late for you to back out.
A legitimate investor should be able to show you the comps (recently sold homes that are similar to yours) and cost estimates they used to value your home.
5. Unclear or unreasonable contract terms
A purchase contract should clearly define the amount of earnest money an investor will set down as a deposit (a minimum of 1% deposited into an escrow account upon signing is typical), the amount of time they have to conduct due diligence (complete inspections and title work, etc.), and what happens to the earnest money if they choose to back out of the contract after the due diligence period has expired.
Look for exit clauses that allow the investor to back out with minimal penalty, or vague contingencies that may allow them to renegotiate up to the closing date.
6. Weak online presence
Do your research! A legitimate investor should be easy to find online via their website, social media profiles, or 3rd-party review sites like Google and BBB. If the investor has no online presence, has few or only negative reviews, or their reviews seem fabricated, that’s a big red flag.l
7. Demand for upfront fees
Legitimate investors don’t ask for large amounts of money upfront — in fact, they typically pay all or most of the costs associated with the transaction. If the investor requests a fee for processing, inspections, or "administrative costs" before signing a contract, this is usually a sign of a scam.i
8. Closing delays or changing contract terms
An investor who continuously delays the closing or keeps changing the terms of the deal could be trying to take advantage of the seller by causing frustration, pressuring them to give in to unfavorable terms, or backing out without consequences.
9. No transparency around exit strategy
If the investor is unwilling to explain what they plan to do with the property after they purchase it (such as whether they will rehab and sell, rent it, etc.), it may indicate that they're intent on wholesaling — meaning they're looking sell or "assign" the contract to another buyer rather than purchase the property themselves.
While there's nothing inherently wrong with wholesaling — especially if the buyer is upfront about their plan — the deal could hit a snag if they're unable to find a buyer before closing. In that case, they may try to back out at the last minute
In a wholesaling scenario, it becomes especially important to understand what happens if there's a closing delay — whether the investor will forfeit their earnest money deposit or purchase the property themselves.
How to protect your interests when selling to an investor
Before signing with an investor, "research their reviews and reputation, compare multiple offers, get inspections and repair estimates done first, and hire an agent or real estate attorney to review the contract" advises investing expert Andrew Lokenaugh.
To avoid any last-minute surprises you should also take steps to verify the buyer's financing, set clear terms around due diligence, and understand the investor's exit strategy.
"Be sure to ask for proof of funds and define the inspection period," offers Charles H. Chandler III, CEO and Co-Founder, My Tennessee Home Solution. "Ask the investor about earnest money, what happens if the inspection is bad (or if there is a need for one), and if the investor is actually buying the property."
Slowing down to ask questions and make sure everything is in writing can go a long way toward protecting your interests if a deal goes south.
A free service like Clever Offers can save you time by sourcing competing offers on your behalf — with the added assurance that they're from legitimate investors who have already been vetted based on funding and track record.
How to negotiate price with an investor
Many investors make their best offer up front because they've already worked out what it'll cost them to own your house. But you can still use some negotiation tactics to up your sale price:
- Don't just call one investor. "Call multiple investors and let them compete for your home," advises San Diego-based realtor Susie Brant. "When they know there's competition they will try harder to earn your business." You can also use a free service like Clever Offers to get multiple competing offers at once.
- Make sure you're comparing apples to apples. "Don't just look at the price," says Brant. "Consider the extras like who's paying the closing costs, who's paying the transfer taxes, escrow fees, title fees, and so on. A good investor will offer to pay everything so as to make the process as easy for you as possible."
- Provide utility bills, property tax records, and rental income statements. Rental property investors will consider monthly expenses when determining how much to offer. If they over-estimate these costs, you can prove that your home is actually more affordable than they think by providing them with utility statements and property tax bills. You can also show them how much you have charged for monthly rent in the past.
- Have an idea of your home's pre- and post-repair value. Any good investor will already be looking at local comps to determine a price point, but knowing the true value of your home can help you size up their offer. You can often find a realtor willing to provide a home value estimate for free.
- Have a professional look over the contract. "If you aren't working with a realtor, consider having a lawyer look over the paperwork before you sign," cautions Brant. "It's not cheap, but this is a big transaction and worth having some help. If the investor can't wait a few days while you run the contract past your lawyer, that's a big red flag."
- Don't feel pressured to make a decision. "Look for transparent investors who provide reasonable offers, time for inspections, and don't pressure overnight decisions," suggests Waldon. "Take time to weigh all options before accepting an offer."
Selling to an investor vs. a realtor
For most home sellers, listing on the MLS with a realtor will result in a higher sale price than going directly to an investor — even if your house needs work and you need to sell quickly.
The more buyers your property is exposed to, the more competitive bids you're likely to get on your house. And while a traditional home sale typically takes 30+ days to close, it doesn't have to.
"If the buyer brings cash, they can close just a couple of days after receiving a title report," advises Austin-based realtor JC Young. "Buyers who have already gone through the pre-approval and underwriting process with a lender can close 14–17 days after signing the contract."
Experienced realtors know how to position your home to attract the right buyer — including marketing the home as is, requiring that buyers bring cash or other proof of funds, and setting a deadline for submitting offers.
If you're worried about selling costs, know that real estate agent commission is always negotiable.
A low commission real estate company could potentially save thousands of dollars off your home's final sale price working with. These companies typically charge listing fees of 1–2%, compared to the typical 2.5–3%. On a $400,000 home sale, that translates to a commission savings of $4,000–8,000.
Bottom line: If you're considering selling to an investor, rest assured that you have options beyond selling for a low price.
FAQ
How much will an investor pay for my house?
With some exceptions, investors typically pay no more than 70% of a home’s fair market value (after repairs, and minus repair costs). In exchange for a low price, they can often pay cash and close very quickly — in some cases, in as little as a week.
Do investors pay fair market value?
Investors pay less than a home’s fair market value. Because they purchase properties in as-is condition, they need to accommodate for repair costs and still make a profit when they relist the home.
Can an investor make me a cash offer?
Yes, investors frequently make cash offers on homes. Though they offer less than the home’s fair market value, a cash offer will speed up the closing process, which is often slowed down by financing hang-ups.
Will an investor buy a house in foreclosure?
Yes, many investors will buy a home in the early stages of foreclosure. When you've fallen behind on payments, selling to an investor for cash can prevent a foreclosure from appearing on your credit.
