How much do cash home buyers pay in Miami-Dade?

There is no single percentage, and any buyer who quotes one before seeing your house is anchoring you rather than pricing your property. What is consistent is the method, and once you can run it yourself you can check any offer you are given.

Offers are built backwards from after repair value, which is what the house sells for once it is fixed. From there a buyer subtracts what it costs to get it there and what it costs to carry the money while they do. On a house that needs cosmetic work only, that subtraction is small and the offer sits close to as-is market value. On a house with a failed roof, an open permit, and a kitchen from another era, the subtraction is most of the gap people complain about.

1. 1
   Start with after repair value

   Sold comparables of renovated houses in the same neighborhood, in the last six to twelve months, at a similar size and bed and bath count. Sold comparables only. Asking prices are opinions.

2. 2
   Subtract the repair budget

   Priced at what a contractor actually charges in Miami-Dade, with permits included in the number. Renovation television is not a source. A roof, an electrical panel, and an open permit closeout are each real money before anybody paints anything.

3. 3
   Subtract the holding costs

   Taxes, insurance, utilities, and the cost of the money for however many months the work and the resale take. Insurance on an older Miami-Dade house is not a rounding error, and neither is the tax bill after a sale resets the assessment.

4. 4
   Subtract the cost of selling it again

   When the buyer resells, they pay commission, closing costs, and usually a credit to their own buyer after inspection. That comes out before any profit exists.

5. 5
   Subtract the buyer's margin

   This is the part nobody likes and everybody has. Someone taking the violation, the tenant, the roof, and the risk that the resale takes longer than planned is paid for taking it. A reasonable margin is a number a buyer will show you on request. Watch what happens when you ask.

6. 6
   What is left is the offer

   If a buyer will not walk you through those five subtractions on your own house, what you have in front of you is a starting position rather than a priced offer.

The reason a lower gross price can still be the better deal is that a listed sale has costs a cash sale does not. Here is where each one lands.

Run the arithmetic rather than comparing headline numbers. The shape of it looks like this.

If you want a rule of thumb to sanity check an offer, use this one and hold it loosely. Cash buyers commonly work back from somewhere around 70 to 80 percent of after repair value and then subtract the repair estimate on top of that. It is a starting posture across the industry rather than a law, and it moves with two things: how much work the house needs, and how confident the buyer is in the resale.

• Cosmetic work only. Expect the offer to land much closer to as-is market value, because there is very little to subtract. If a buyer prices a tidy house like a gut job, ask to see the repair list.
• Structural, roof, or permit problems. Expect a wide gap, and expect the buyer to show you the repair number that made it wide.
• Liens come off at their payoff figure. Code fines and back taxes come out of the proceeds at their certified payoff. If the offer drops by more than the payoff figure, ask why in writing.
• Location changes the risk. A rehab in Cutler Bay and one in Allapattah do not carry the same resale certainty, and an honest offer will reflect that rather than pretend otherwise.
• Occupancy changes it too. A tenant on a lease, a family member in place, or a property that cannot be entered all price differently, and they should be discussed openly rather than discovered late.

1. 1
   Pull your own sold comps

   Renovated houses, sold, near you, within the year. That number is the ceiling on every honest conversation about your property.

2. 2
   Get one repair number

   A single licensed contractor walking the house and pricing it, permits included. One real quote beats any amount of guessing.

3. 3
   Do the subtraction yourself

   After repair value, minus repairs, minus a few months of carrying costs, minus resale costs. You now know roughly where a fair offer sits before anyone tells you.

4. 4
   Ask the buyer for their math

   Their after repair value, their repair estimate, their holding assumption. If those three numbers are close to yours, the offer is honest even if it is lower than you hoped.

5. 5
   Get a second offer

   It costs you nothing and it takes a day. First offers are rarely best offers, and a real buyer expects to be compared.

• A price over the phone before anyone has seen the house. That is an anchor, and it comes down after the inspection.
• A long inspection or due diligence period. A buyer spending their own cash does not need two or three weeks to decide what they already offered.
• An assignment clause, or and/or assigns beside the buyer's name. Your closing is being shopped to somebody else.
• No proof of funds, or a screenshot with no name on it. Ask for a bank letter naming the entity that is signing.
• A refusal to name the title company. Real closings happen somewhere specific, and you should know where on day one.
• Any fee asked of you before closing. A buyer pays you. There is no appraisal fee or processing fee coming your way.

For the full checklist on separating a real buyer from a middleman, read is We Buy Houses a scam.