What Is a Fair Cash Offer on a House? A Massachusetts Seller’s Guide

A fair cash offer is not a percentage of market value. It is one where the arithmetic behind it is sound and the buyer will show it to you.

That distinction is the whole answer. Two offers on the same house can differ by twenty thousand dollars and both be fair, if one buyer has a more accurate repair estimate or a lower cost of capital. And an offer can look generous and be unfair, if it is going to fall after the walkthrough.

Here are four tests you can apply yourself to offers from cash home buyers in Massachusetts, and five behaviors that should concern you regardless of the number.

Test one, ask them to show the subtraction

Every legitimate offer is built the same way: after repair value, minus repairs, minus holding costs, minus resale costs, minus margin.

Ask for the first two figures and ask them to walk you through the rest. A buyer who calculated honestly does this without difficulty, because they have the numbers in front of them.

A buyer who will not, or who cannot, either did not calculate it or would rather you did not look. That is more informative than the offer itself. Our guide to how cash buyers calculate an offer sets out the full method so you know what you are being shown.

Test two, check the after repair value yourself

This is the input that matters most and the easiest for you to verify.

Look at recent sold prices for properly renovated comparable properties in your town. Not asking prices, and not the whole county. If the buyer’s after repair value is materially below what renovated houses on your street have actually sold for, the offer is built on a low ceiling and everything below it is depressed accordingly.

Test three, sanity check the repair estimate

Get one contractor’s view, even informally. You are not looking for precision, you are looking for order of magnitude.

If a buyer has $90,000 of work on a house a contractor would quote $40,000 for, the difference is coming out of your price. Repair estimates are where an unfair offer usually hides, because they are the hardest input for a seller to challenge.

Test four, compare against a realistic listing net

The comparison most sellers get wrong is cash offer against market value. The right comparison is cash offer against what a listing would actually put in your hand.

Take the likely sale price, subtract commission, subtract the repairs a lender would require before financing it, subtract the deeds excise levied under Chapter 64D at roughly $4.56 per $1,000, subtract carrying costs for the months involved, and adjust for the chance the first buyer’s financing fails.

Sometimes the listing still wins clearly, and on a sound property it usually does. Sometimes the gap is far narrower than the two headline numbers suggest.

Five behaviors from cash home buyers in Massachusetts that should worry you

The number falls after the walkthrough. A serious buyer’s initial estimate should survive the visit with only minor adjustment for something genuinely unexpected. A large drop means the first number was a device.

Pressure to sign quickly. In Massachusetts, signing an offer to purchase that states it creates binding obligations forms a contract, as the Supreme Judicial Court held in McCarthy v. Tobin. There is no legitimate reason a buyer needs your signature before your attorney has read the document.

Reluctance to provide proof of funds. A genuine buyer is asked for this constantly and produces it without fuss.

An assignment clause they will not remove. That means they may not be your buyer at all, and your sale depends on them finding somebody else.

Discomfort with you having your own attorney. Massachusetts requires an attorney at the closing regardless. A buyer who suggests you do not need your own representation is telling you something.

What fair does not mean

It does not mean market value. A cash offer sits below what a repaired property would achieve on the open market, and any buyer claiming otherwise is either mistaken or not being straight.

It does not mean the highest number in front of you either. The highest offer from a buyer who cannot close, or who will reduce it in three weeks when you are committed, is worth less than a slightly lower one that completes.

What you are actually buying with the discount

Certainty, speed, no repairs, no commission, and a closing date you choose rather than one set by somebody else’s lender.

Whether that package is worth the gap depends entirely on your circumstances. On a sound, financeable property with time available, it usually is not, and you should list. Where a lender would balk at the condition or a real deadline exists, it often is.

Since this article argues you should ask a buyer to show their arithmetic, here is ours. Our offers usually land between 60 and 70% of after-repair value before transaction costs, holding costs and margin. On a property needing heavy structural work it moves closer to 55 to 60%. On a straightforward cosmetic job it can stretch toward 70 to 75%. Any cash buyer should be able to tell you where their number sits on a scale like that, and why.

The short version

Fairness is about the method, not the percentage. Ask for the arithmetic, check the after repair value against real sold comparables, sanity check the repairs with a contractor, and compare against a realistic listing net rather than a listing price.

You can request a cash offer and put all four tests to it. A buyer who welcomes that is usually the one worth dealing with.