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Have you ever wondered how City/Sate companies that buy houses for cash work? Maybe you’re struggling to sell your City/State home and are thinking to sell your home for cash.
Below we’ll explain the inside secrets to how companies that advertise we buy homes for cash work.
The secret to how City/State companies that buy houses for cash work; they follow the 70% After Repair Value (ARV) formula.
Practically every real estate investor or cash buyer follows the industry norm of the 70% ARV formula. It is a rule of thumb that calculates the maximum price an investor should bid for your home.
In order for a buyer to arrive at an offer price for your home, he will first calculate all the repair costs necessary to sell the home. He will then estimate the future value of your home after all the repairs have been completed.
An investor will pay a maximum of 70% of the estimated future value of your home once it has been renovated minus the repair costs…