How a Spokane Cash Offer Is Actually Calculated (and Where the Money Goes at Closing)
Most sellers get a cash offer, feel it is lower than they hoped, and never learn how the number was built. That is a bad way to make a decision worth hundreds of thousands of dollars. This is the formula Horizon Home Buyers uses on every Spokane house, followed by the part nobody explains: what the title company deducts before the wire hits your account.
The four inputs
1. After-repair value (ARV). We start with what your house would sell for on the open market in updated condition. That comes from recent closed sales in your part of Spokane, not a Zestimate. A 1940s bungalow on the South Hill and a 1990s rambler in Mead have very different buyer pools, and the comps have to match.
2. Repairs. Everything it will take to get the house to that condition: roof, furnace, sewer line, electrical, plumbing, water damage, flooring, paint, and whatever a future buyer’s lender or inspector would flag. Because our sister company does restoration work in Spokane, these figures come from actual job costs, not a rule of thumb.
3. Our costs of ownership. Closing costs on both the purchase and the eventual resale, insurance, utilities and property taxes while we own the property, and the cost of the money tied up in the rehab. A house that takes six months to renovate costs more to hold than one that needs paint and carpet.
4. A margin. We are a business. The offer includes a reasonable profit for taking on the risk that the repairs run over, the market softens, or the house sits.
Put simply: ARV, minus repairs, minus our costs, minus margin, equals the offer. Nothing else is deducted from it. No commission, no fees, no “processing charge.”
Why the offer does not change later
Two things separate a real cash offer from a bait offer.
- No inspection contingency. The walkthrough happens before we write the number. We are not going to come back after you have stopped talking to other buyers and ask for a price cut because of the roof we already saw.
- No financing contingency. We do not use bank financing, so there is no appraisal that can come in low and no loan that can fall through in week five.
If a buyer’s offer has either contingency in it, the number on the first page is not the number you will get.
What actually leaves your proceeds
Here is the part that surprises people. Even with no fees from us, the title company still pays certain things out of the sale price before wiring you the balance. In a Horizon purchase:
| Line item | Traditional listing | Sale to Horizon Home Buyers |
|---|---|---|
| Listing and buyer agent commission | Typically around 6% | None |
| Seller’s closing costs (title, escrow, recording) | Typically around 2% | We pay them |
| Repair credits after inspection | Negotiated | None |
| Mortgage or HELOC payoff | Yes | Yes |
| Prorated property tax to closing date | Yes | Yes |
| Liens recorded against the property | Yes | Yes |
| Washington real estate excise tax (REET) | Yes | Yes |
| Holding costs while waiting to close | 60 to 90+ days of payments | About a week |
The mortgage payoff, prorated taxes, recorded liens and REET are not our charges. They exist in any sale, and the title company handles them the same way for everyone. REET is Washington’s graduated, seller-paid transfer tax; escrow calculates it from the sale price and files the affidavit with the Spokane County Treasurer so the deed can record.
An illustration, not a quote
Suppose a house would sell for $400,000 in updated condition, needs $60,000 of work, and would take four months to renovate and resell. A cash offer might land somewhere around $280,000 to $300,000 depending on the block, the scope of work, and the market that month. That is meaningfully below $400,000. But the seller in a listing would not net $400,000 either: subtract roughly $24,000 in commission, around $8,000 in closing costs, the repairs a retail buyer’s lender requires or the credit they negotiate instead, and three months of mortgage, insurance and utility payments while the house sits on the market.
These numbers are for illustration only. Every property is different, and the only way to know your number is to ask for it.
When we will tell you to list instead
If the house is in good shape, you have no deadline, and you can afford to carry it for a few months, you will probably net more with an agent. We say so on the phone. Our offer makes the most sense when the house needs work, the timeline is short, or the situation, such as a probate, a divorce, a foreclosure or tenants, makes showings impractical.
Getting the number costs nothing. Call 509-383-3034 or use the form on this page, and compare it against a listing with your eyes open. Our compare page lays the two paths side by side.
