Is a cash offer from a home buyer less than market value?
Usually, yes. A cash home buyer like Horizon Home Buyers will not pay full retail value, because the offer accounts for repairs, holding costs and a margin. What you should compare is the net: a listing's higher price minus roughly 6% commissions, about 2% closing costs, repairs, and three months of mortgage and utility payments while you wait. For houses that need work or sellers who need certainty, the cash net is often close and the sale is guaranteed.
We would rather answer this honestly than have you find out at closing.
The “top line” versus what lands in your account
Suppose an agent says your house could list for a certain figure. Before that becomes money in your pocket, subtract the commission (around 6%), seller-paid closing costs (around 2%), whatever the buyer’s inspector finds, and the mortgage, insurance, utility and tax payments you make during the 90 or so days it typically takes to close. If the buyer’s financing falls through, add another month and start over.
A cash offer is lower at the top line but has none of those deductions, and closes in days. Our compare page lays the two side by side.
When the gap is small
The gap between a cash net and a listing net narrows when:
- the house needs significant repairs a retail buyer’s lender would require;
- there are tenants, a probate, or a divorce decree that makes showings impractical;
- you are carrying two mortgages or facing a foreclosure sale date.
When you should list instead
If the house is move-in ready, you have no deadline, and you can afford to carry it, list it. We will say so on the phone. Getting an offer costs nothing and gives you a real number to compare against.