The formula, in one line
Every written offer from Minnesold follows the same formula:
After-repair value - repair costs - holding costs - resale costs - our profit = your offer
We show each line because sellers are right to be suspicious of cash offers that come with no explanation. If you can see the math, you can check it, question it, and compare it with listing.
Line by line
1. After-repair value (ARV)
This is what the house would likely sell for after it’s repaired and updated. We estimate it from recent sales of similar homes nearby. It’s usually the biggest number on the page, and it’s the one to ask about first.
2. Repair costs
Everything it would take to bring the house up to the condition of those comparable sales: roof, furnace, windows, kitchen, baths, flooring, paint, and anything a city TISH evaluation requires. Older Minnesota homes often add old wiring, galvanized plumbing, or foundation work. If you have contractor bids or an inspection report, we’ll use them.
3. Holding costs
While the house is being repaired and resold, someone pays the property taxes, insurance, and utilities. That’s us, so it’s a line on the offer.
4. Resale costs
When we (or a buyer we assign to) resell the house, there are selling costs, closing costs, and financing costs. They come out here.
5. Our profit
We’re a business. We show our profit as its own line instead of hiding it in the other numbers.
An illustrative example
Round numbers, for illustration only. This is not a quote.
| Line | Amount |
|---|---|
| After-repair value | $300,000 |
| Repairs and updates | -$35,000 |
| Holding costs (taxes, insurance, utilities) | -$8,000 |
| Resale costs | -$22,000 |
| Our profit | -$25,000 |
| Example written offer | $210,000 |
Then, at closing, your mortgage, any liens, and unpaid property taxes are paid from that amount. What’s left is yours.
Why a cash offer is below retail
A cash offer is lower than a retail price because the buyer takes on the repairs, the holding costs, the risk, and the cost of reselling. That’s the tradeoff. For some houses, it’s a good trade for the seller. For others, listing is better. Our guide to cash offer vs. listing in Minnesota walks through how to compare.
What we pay that doesn’t show up as a deduction
Some costs that usually land on a seller are simply ours on a sale to us:
- Seller’s standard closing costs: the Minnesota state deed tax (plus the Hennepin/Ramsey surcharge), the abstract update or title search, and title company closing fees. See Minnesota seller closing costs.
- The cleanout of anything you leave behind, donation first.
- Any required TISH evaluation or septic compliance inspection.
- No commission.
From range to written offer
After your first call, you get a preliminary range within 24 hours. It’s a range because we haven’t seen the house. After the walkthrough, in person or by video, we send the firm written offer within 24 to 48 hours. If something we see changes a number, the offer explains why.
How we estimate after-repair value
The after-repair value is based on recent sales of comparable homes: similar size, age, style, and location, in updated condition. We look at:
- Sales in the same neighborhood or nearby, as recent as possible
- Differences in bedrooms, bathrooms, garage, and lot
- Condition of the comparable homes when they sold
- Local factors, like a busy street or a lake view
If you have recent sales you think we should consider, send them. We’ll explain how we weighed them.
How we estimate repairs
During the walkthrough, we note:
| System | What we look at |
|---|---|
| Roof and exterior | Age, leaks, siding, windows |
| Mechanical | Furnace or boiler, water heater, electrical panel |
| Plumbing | Supply pipes, drains, sewer line concerns |
| Foundation | Cracks, bowing, water |
| Interior | Kitchen, baths, flooring, paint |
| City requirements | Likely TISH items where required |
Bigger items get individual estimates. If you have contractor bids or an inspection report, we’ll use them.
Why two houses on the same street get different offers
Two similar-looking houses can get very different offers. Usually it’s the repair line: one needs a roof and a sewer line, the other doesn’t. Sometimes it’s the after-repair value: one has a garage or an extra bathroom. The written offer shows you which lines drove the difference.
Questions to ask about any offer
- Which comparable sales support the after-repair value?
- What repairs are included, and roughly how much for each big item?
- Who pays the closing costs?
- Can the agreement be assigned, and does that change anything for me?
Ask us these, and ask any other buyer too. If you’re weighing whether to repair first, see fix up or sell as-is.
Minnesold's team includes a licensed Minnesota real estate agent. Information on this site is general and educational. It is not legal, tax, or Medical Assistance advice. Talk with a probate attorney, elder law attorney, or CPA about your situation.