{"id":375,"date":"2022-11-19T21:25:17","date_gmt":"2022-11-19T21:25:17","guid":{"rendered":"http:\/\/mn.arenter.com\/coach2\/?p=375"},"modified":"2022-11-19T22:01:16","modified_gmt":"2022-11-19T22:01:16","slug":"why-is-your-cash-offer-so-low","status":"publish","type":"post","link":"http:\/\/mn.arenter.com\/coach2\/2022\/11\/19\/why-is-your-cash-offer-so-low\/","title":{"rendered":"Why Is Your Cash Offer So Low?"},"content":{"rendered":"<p>Making a cash offer is easy, and oftentimes we just follow the formula ARV * 70% &#8211; Repairs = MAO<\/p>\n<p>ARV = After Repaired Value<br \/>\nMAO = Maximum Allowable Offer<\/p>\n<p>Why 70%?\u00a0 This covers holding costs, unknowns, gotchas, and our margin.\u00a0 If you list the home with an agent, they&#8217;ll often charge 6 or 7%, and then you&#8217;re sitting on the market for 30-60 days before you get the sale, (at a minimum).\u00a0 When we buy your home, we have to bring in new cash, so the 70% includes the cost of that money (it&#8217;s not free), and our margin which is usually 8-9% of the sale price.\u00a0 Holding costs and risk often eats up what is perceived as a huge cut in price.\u00a0 This formula is solid, but in a sketchy (or falling) market, I&#8217;ll often times reduce that to 65%, then don&#8217;t forget to back out repairs.\u00a0 See a video explaining this further <a href=\"https:\/\/youtu.be\/xe7bNSdRh_4\">here<\/a>.<\/p>\n<p><iframe loading=\"lazy\" title=\"Why is Cash Offer So Low?\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/xe7bNSdRh_4?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Making a cash offer is easy, and oftentimes we just follow the formula ARV * 70% &#8211; Repairs = MAO ARV = After Repaired Value MAO = Maximum Allowable Offer Why 70%?\u00a0 This covers holding costs, unknowns, gotchas, and our margin.\u00a0 If you list the home with an agent, they&#8217;ll often charge 6 or 7%, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":379,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pagelayer_contact_templates":[],"_pagelayer_content":"","footnotes":""},"categories":[30,25,5,22,23],"tags":[],"class_list":["post-375","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-strategies","category-coaching-tips","category-learning","category-opm","category-real-estate-investing"],"_links":{"self":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts\/375","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/comments?post=375"}],"version-history":[{"count":3,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts\/375\/revisions"}],"predecessor-version":[{"id":378,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts\/375\/revisions\/378"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/media\/379"}],"wp:attachment":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/media?parent=375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/categories?post=375"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/tags?post=375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}