What Will a Cash Buyer Actually Offer for My San Diego House?
Garner Group Inc — 12 years in San Diego real estate, buying and renovating houses since 2016. Michael Garner is a licensed California real estate agent (DRE #01969152) purchasing property for his own account, not representing sellers. Douglas Elliman is a licensed California real estate broker, DRE #01947727.
The short version
A cash as-is offer starts from what the house would be worth renovated, then subtracts the cost of the renovation, the months of holding costs while that work happens, and the buyer's margin for taking on the risk. That is why it lands below your Zestimate — the Zestimate assumes a house in good condition, and the gap is roughly what it would cost you to get it there yourself.
Most articles on this answer “it depends” and then ask for your address. Here is the arithmetic instead, so you can run it on your own house before anyone calls you.
How the number is actually built
Every legitimate cash offer on a house that needs work is built the same way, whoever is making it. Start with what the house would sell for on the open market once it has been renovated — not what it is worth today, and not the Zestimate. Then subtract three things.
First, the renovation. On the houses we buy in San Diego County that is rarely just finishes; it is usually a roof, or a panel and a repipe, or permits pulled retroactively on a garage conversion that was never legal. Second, holding costs — property taxes, insurance, utilities, and financing on the purchase for the months the work takes. Third, the margin, which is what pays for the risk that the renovation costs more than it was scoped at.
What is left is the offer. It is not a lowball tactic and there is nothing clever about it; it is the same calculation any buyer of a fixer runs, including the ones who do not show you their working.
What moves it up or down
Four things do most of the work. Whether the problems are behind the walls — original electrical, cast iron drains, foundation movement, and a roof at the end of its life are expensive and they are also invisible in photographs, which is why buyers who have not looked properly try to renegotiate over them later. Permit status— unpermitted square footage cannot be counted by an appraiser, so it does not add to the finished value until it is legalised.
Location within the county, because the same house costs different amounts to renovate in different places. Coastal Oceanside carries exterior costs that inland El Cajon does not; El Cajon carries HVAC and roofing costs that the coast does not; a hillside lot in Vista costs more to run a job on than a flat one in Santee, because access decides whether a truck and a dumpster can reach the house. And how much has to be cleared out, on a house that has been lived in for forty years.
The comparison people get wrong
The instinct is to compare the cash offer against the Zestimate. That is not the comparison. The right one is: cash offer today, against what you would actually net listing it — the sale price minus commission, minus the repairs a lender will require before it funds, minus however many months of mortgage, taxes, and insurance you pay while that happens, minus whatever the buyer negotiates off after their inspection.
Run that honestly and one of two things happens. On a house in decent condition, listing wins comfortably, and you should list it. On a house that needs real work, the two numbers get much closer than people expect, and the cash offer comes with a date you can plan around.
Checking the buyer is real
The highest offer is worth nothing if it does not close, and the most common way a cash sale fails in San Diego is that the “buyer” was never buying. Wholesalers tie a house up under contract with no intention of purchasing it, then try to sell that contract on to a real buyer at a markup. If they cannot find one, they walk, and you have lost weeks.
Two checks catch it. Ask for proof of funds — a recent bank statement or a letter from whoever holds the money — and read the buyer's name on the contract. “And/or assigns” next to the name means they intend to sell your contract. Ask us for both, the same as you would ask anyone else.
The other failure is the buyer who is real but renegotiates. They win the contract on price, then use the inspection period to come back with a repair list once you have already given notice and booked movers. Ask directly, in writing, whether the offer is subject to change after an inspection.
When to list instead
If your house would pass a lender's conditions as it stands, do not sell it to a cash buyer. The market will pay more and it will not take as long as you think. The same goes if the only work needed is cosmetic — paint and carpet return more than they cost, and no as-is offer will price them in your favour.
We tell people this on the first call, because a house we are not the right buyer for is not worth either of our time. If you want the number anyway to use as a floor, ask for it and we will give you one.
Garner Group buys in its own name with its own funds, covers both sides of closing costs, and does not renegotiate after an accepted offer.
FAQ
Why is the cash offer lower than my Zillow estimate?
A Zestimate is an estimate of what the house would sell for on the open market in good condition. A cash as-is offer subtracts the renovation the house needs, the months of holding costs while that work happens, and the buyer's margin for taking on that risk. The gap between the two numbers is roughly what it would cost you to close it yourself.
Can I negotiate a cash offer?
You can, and you should ask what is driving the number. What you should be more interested in is whether the buyer will still be at that number on closing day. An offer you can negotiate up and then get renegotiated down in escrow is worth less than a lower one that does not move.
Do I pay closing costs or commission?
With Garner Group, no. We cover both sides of closing costs, and no commission is charged to you because no agent is representing you in the transaction. Ask any other cash buyer to confirm the same in writing — not all of them do.
How do I check that a cash buyer actually has the cash?
Ask for proof of funds — a recent bank statement or a letter from the institution holding the money — and read the buyer name on the contract. If it says "and/or assigns", they are planning to sell your contract rather than buy the house.
Find out what we'd pay.
Tell us about the house. We'll come and look at it, explain how we got to the number, and tell you plainly if you would do better listing it instead.