I have been lucky enough to work with Dustin Buys Houses for the past few years, and can say that I truly value working with them. They are professional, prompt and have ALWAYS followed through on their promises. They take time to listen, and adapt to situation, and always have the interest of other people in mind. They are LOCAL Pittsburgh people who care about family and their community. If you are thinking about selling your home, you should consider calling Dustin Buys Houses, you will have a 1st class experience.
How Do I Sell My Pittsburgh Home For Cash?
Because we are cash home buyers, no need to involve banks, appraisers, home inspectors, or agents. We make it easy by eliminating the middlemen.
So You Want To Sell Your House For Cash But Don’t Want A Lowball Offer…Right?
At Dustin Buys Houses we believe in 100% Transparency and Honesty. We know you have options!!! And we want you to know EXACTLY how this process works so you can make an informed decision of whether or not a cash offer on your home may be right for you. The below article explains precisely how we calculate your offer…we truly have nothing to hide!!!
You’re probably thinking, theres a million We Buy Houses companies in Pittsburgh right? They all promise cash offers, quick closings, as-is blah blah blah. All sounds great right?
Most of these companies offer inflated values over the phone without even looking at your home, or even if they do come out to the property to take a look…. they give you a high offer to lock up your house under contract and then use an inspection contingency to knock you down on price once the offer is accepted. Some of these companies aren’t even based in Pittsburgh, they’re from a different part of the state or even across the other side of the country! They want to discourage you from doing your research, and exploring options from other companies….
We Believe This Is The WRONG Way To Do Business
Why Low Ball or Inflated Offers Don’t Make Sense To Us
It is in our best interest to make you an offer that ACTUALLY makes sense. No Low Balls, No Games, No Gimmicks…
We spend a lot of time doing research, driving all over Pittsburgh, evaluating your home, talking to you on the phone and in person, so it only makes sense that we want to make FAIR offers that actually get accepted AND close, otherwise we wouldn’t be in business! Of course we have to make a profit to keep our company going, but it is in our best interest to get our offers accepted, and in order to do that we want to offer you the HIGHEST price possible so that you’re happy with our offer and want to work with us.
Our offers are based on the ACTUAL numbers….its a simple math problem.
Simply put, our cash offers are based off of a fairly simple formula that goes like this: Your Offer = ARV (After Repaired Value) – Repair Costs – Holding/Purchase Costs – Selling Costs – Minimum Profit.
The ARV (or after repaired value)
The ARV is the likely value of what you’re home will be worth once any necessary repairs or updating is made. This is similar to the appraised value, however we need to do some work to the home before it’s actually worth this number! Hence AFTER Repaired Value.
These costs vary greatly from property to property. This category includes what it costs to actually purchase, and “Hold” the home for the time period while we’re renovating. Examples of holding costs would be: taxes, insurance, utilities, lawn care, any type of regular expense that a homeowner would normally pay monthly as part of property ownership.
Now those purchase costs….you may be thinking, well wait? If there are no agents involved, why does it cost you money to purchase the property? We wish this was the case! But, in the state of PA on any property transfer we pay: title insurance, transfer tax, deed preparation and closing costs, and municipal fees and certifications. In a traditional home sale, you as the seller, are responsible for some of these costs. BUT since, we pay all your closing costs for you…you don’t have to worry about paying ANY of these, the burden is ours. These costs typically add up to around 4-6% of the ARV.
Our Minimum Profit
Yes, we do have to make some money to stay in business, and feed our families. We focus on volume over huge profits, because the more offers we get accepted, the more houses we can do, the more money we can make, and the more money in your pocket! We believe this is more of a win-win scenario for all parties involved.
Calculating The ARV On Your Pittsburgh House…
Let’s say your next door neighbor for the most part has the same property as yours. What we mean by this is you both have 2 story brick colonials with 3 bedrooms and 2 full baths, finished basements, and a 1 car garage.
BUT, your neighbor just spent money on a new kitchen, renovated a bathroom, installed all new flooring, and painted the whole house. Then, they turned around and SOLD their property for lets say….$250,000.
You may be thinking….so wait my home must be worth $250,000 or close to it as well right????
Not quite, but it COULD be. In order for your home to also be worth $250,000, the same amount of work would need done to it to be worth the same value (that means new kitchen, bathroom, flooring, and paint).
So My House In It’s Current Condition Is Valued At What Then??? We refer to this as the AS-IS value.
Generally speaking, the AS-IS value and the After Repaired Value are NOT close in numbers. Although your neighbors house sold for $250,000, depending on the current condition of your home, your home’s AS-IS or market value without doing any repairs may only be worth for example $160,000.
This is an ACTUAL house we bought and the numbers we used to make our offer.
Think of this as your house in it’s current condition. Totally livable, just could use some TLC or updating.
Our House Vs. Neighbors House
The Neighbor’s House sold for $180,000. It looks great! No wonder it sold so fast!
So in order for us to get the house we’re making an offer on, look like the neighbor’s house, and get it to sell for $180,000, we determined that we would need to spend $50,000 on repairs/updating.
Adding It Up…
- The ARV: (Neighbors House) Sold for $180,000.
- The Repairs Needed: What we need to do to get your house in the same condition as the neighbors. $50,000
Now Let’s Add in our Purchase/Holding costs, Our Selling Costs, and Our Minimum Profit.
- Purchase/Holding Costs: The cost to purchase the home (insurance, taxes, closings costs, municipal fees, cost of capital) $12,278
- Selling Costs: The cost to sell it (agent commission, closing costs, taxes) $8,367
- Minimum Profit: Our minimum profit for this house was $25,000
We bought this house for $84,000, cash, as-is, no agents, no fees, no repairs, and no cleaning.
ARV ($180,000) – Repairs ($50,000) – Purchase/Holding Costs ($12,278) – Selling Costs ($8,367) – Minimum Profit ($25,000) = YOUR OFFER ($84,000)
As you can see, for us it’s all about the numbers! Even if you are in a situation where you desperately need the cash fast, we do NOT low ball or take advantage of anyone’s situation. Many people we work with are not in a dire situation, and just don’t want to deal with putting their house on the market with an agent. Your offer is ALL based on the math….it’s as simple as that.
Ok if my house would sell for $180,000 all fixed up, how much would sell for As-Is with an agent?
Let’s circle back to that other number we were talking about: The As-Is Value
The real estate agent (or sometimes an appraiser) will try to find comparable properties that have sold in AS-IS condition.
As-Is Condition or Value is the value given to a home that is sold in it’s current state and condition…meaning the seller is not making any repairs or doing any updating. The buyer would be buying the property exactly how it currently sits.
The real estate agent or appraiser decides our home in the above example is worth $92,000 in as-is condition.
Now For The Fun Part, Let’s Do Some Math Again!!!!
As-Is Sale On Market With Real Estate Agent
Net Profit To Seller = Purchase Price – Selling Costs – Holding Costs
Purchase Price: The As-Is Value, in this example $92,000.
Selling Costs: Same thing as our above example, only this time YOU would be paying the agent commissions, closing costs, taxes, etc. In this example, this would amount to – approximately 9-10% or $9,000.
Holding Costs: What it costs you to “hold” the property from the time it goes on market, to the time it sells, to when it finally closes. On average 3-4 months and this would cost you in this example approximately $2,740.
Purchase Price ($92,000) – Selling Costs ($9,000) – Holding Costs ($2,740) = Net Profit To Seller ($80,260)
Our Cash Offer Vs. Retail Sale
Comparing Our Cash Offer to an As-Is Sale on the Market With A Real Estate Agent
Our Cash Offer ($84,000) – Net Profit To Seller As-Is ($80,260) = Difference of $3,740
You Read Right….In This REAL LIFE EXAMPLE, the seller put an extra $3,740 in their pocket by choosing us and our cash offer.
We closed in 30 days, as-is, no repairs, no inspections, no cleaning, and the seller got to leave behind their unwanted furniture.