A cash offer can feel like it arrives from nowhere. You fill in a form or make a phone call, describe the house, and a figure comes back within a day. Sellers often ask us how that’s possible without anyone having visited, and whether the number is simply plucked from the air. It isn’t. The process is quicker than an estate agent’s valuation, but it’s built from the same raw materials, with a couple of extra steps that reflect what a cash buyer is actually doing with the property afterwards. Here’s how it works from our side of the desk.
Starting From Open Market Value
Every cash valuation begins with the same question an agent would ask: what would this property sell for on the open market, in its current condition, to an ordinary buyer? We answer that using sold price data from the Land Registry, recent and current listings in the immediate area, and our own knowledge of how particular property types perform locally.
The emphasis is on sold prices, not asking prices. An estate agent valuing your home for marketing has an incentive to flatter the figure, because a higher valuation wins the instruction. A cash buyer has the opposite incentive, so we look at what comparable homes actually achieved, adjusted for size, condition and position. That figure is the ceiling everything else is measured against.
Adjusting For Condition
Next comes the condition of the property as you’ve described it, and later as our survey confirms it. We estimate what it would cost to bring the house to a standard where it could be sold or let without difficulty. Cosmetic issues count for little. Structural problems, damp, roofing, failed heating, old electrics and a kitchen or bathroom that needs replacing all count for a great deal, because they’re real costs we’ll incur.
This is the part of the process where honesty from the seller pays off. If you tell us the roof needs work, we price it in once. If you don’t and the survey finds it, we price it in then, and you’ve lost a week.
Factoring In Location And Resale
Two identical houses in different towns will receive different cash offers, because location determines how quickly and reliably the property can be sold on. A terrace in an area with steady first-time buyer demand is low risk. A large detached house in a thin rural market might sit for a year. The longer the likely resale period, the more the offer has to account for the cost of holding the property in the meantime.
Local factors feed in too: transport, schools, planned development, flood risk, and anything about the street itself that affects saleability.
The Deductions That Make It A Cash Offer
Having arrived at an open market figure and adjusted it for condition and location, we deduct the costs of the transaction and a margin. The costs include our legal fees on purchase and resale, the survey, any refurbishment, holding costs such as council tax and insurance while we own it, and the eventual selling costs. The margin is what makes the purchase worthwhile for us. The result is the offer, and for most properties it falls between 70% and 85% of market value.
That range exists because the inputs vary. A well-located house in reasonable condition sits at the top of it. A property with significant work needed in a slower market sits lower.
What A Cash Valuation Doesn’t Involve
A few things sellers sometimes expect that don’t form part of the process:
- Emotional value. The twenty years you’ve spent in the house don’t move the figure, and nor do the memories.
- Your asking price elsewhere. If the property was listed with an agent at a figure that didn’t sell, that number tells us more about the agent than the house.
- Your reasons for selling. They shape how we structure the sale and the timescale. They shouldn’t shape the price, and you should be wary of any buyer who seems to be pricing your urgency.
- A guess at what you’ll accept. We give you the figure we can complete at, and the survey confirms it.
Why Two Cash Buyers Give Different Figures
If you get offers from several companies and they differ, it’s usually because they’ve estimated the refurbishment cost differently, hold different views on resale time, or apply different margins. Occasionally it’s because one of them has made a high opening offer they intend to reduce after the survey. The way to tell the difference is to ask each buyer how they arrived at their figure and what it’s subject to. A company that can explain its reasoning is pricing honestly. One that can’t is probably negotiating.
Getting A Figure You Can Rely On
If you’d like to understand how the cash house buying process works from first enquiry through to completion, we’ve set it out step by step. For a figure on your own property, the Property Buyers Today team will make an offer within 24 hours of your enquiry, with no obligation and no fee. We cover the survey, the legal costs and the EPC, we buy across England and Wales, and we’ll explain exactly how we reached the number so you can set it against whatever else you’re considering.