How we arrive at a number
On a house, the number comes from three things: what it will be worth when the work is finished, what the work will cost, and a cushion in case we are wrong on either. That is all there is to it. There is no formula we are keeping from you.
- What it is worth repaired. Not the Amityville median of $611,250 on its own, but what houses like yours on your street actually closed at recently.
- What the work costs. Roof, boiler, electric, the kitchen and bath. In Amityville the stock is largely colonial and victorian, and on houses that age the mechanicals are usually the expensive part rather than the cosmetics.
- How long we will hold it. The median Amityville house goes under contract in about 35 days once it is showable, then waits 45 to 60 days more on the buyer's lender. Ours has to get to showable first, and we carry taxes and insurance across the whole of it.
- What we are wrong about. Some of what a house needs only shows once the work starts. We price that in, and it is a big part of the gap between a cash offer and a retail sale.
Why this works for us when it would not for you
This is the part cash buyers tend to gloss over. We run millions of dollars of construction a year. That buys materials at contractor pricing and keeps our own crews working through the year, so the same renovation costs us roughly half what it would cost you to hire it out.
That is the business in one line. It is also why renovating before a sale rarely pays: you would buy the same roof and boiler at retail and hope to get it back at resale, which usually does not happen. We do not make our money by paying you less. We make it by building for less.
If the number does not work for you, tell us so. We would rather have that conversation than pressure anyone. We will look at where you are and give you an honest read on your options, including ones that do not involve selling to us. Plenty of sellers are better off with an agent, and we will say so if you are one of them.
The gap the number covers
As we buy themWeathered wooden front steps with weeds at the base · Amityville
After the workFinished kitchen island with dark wood floors · Amityville
Why the number sits below retail
It is worth being precise about this rather than leaving it as an impression. The gap between what a renovated house on your street fetches and what we pay is not a margin taken out of your pocket. It is four specific costs, and every one of them would otherwise be yours.
The repairs, paid up front rather than at closing. The months of carrying the house while that work runs, with taxes, insurance and utilities running through all of them. The commission and closing costs on the far side. And the risk that opening a wall finds something worse, which on older Amityville stock happens often enough to have a price.
A homeowner paying retail for that work usually cannot recover it in the sale price. We run millions of dollars of construction a year, so the same work costs us in the region of half what you would be quoted, and that difference is what funds the offer.
What the two paths cost in Amityville
Work it against Amityville's own numbers. The median sale here is $611,250. A 5% commission on that is $30,563, and seller closing costs of about 2% add roughly $12,225. Those are costs we can cover on our side. That is $42,788 gone before anyone counts the repairs it took to get the house listable.
There are two waits in a listed sale and people usually only count the first. In Amityville the median house takes about 35 days to go from listed to a signed contract. Then it waits again, typically 45 to 60 days, while the buyer's lender orders an appraisal and underwrites the loan. Call it 80 to 95 days from sign to keys, assuming nothing goes wrong.
The part worth understanding is what a signed contract actually guarantees, which is less than most sellers assume. A retail buyer with a mortgage contingency can walk away right up to the end. If they do not qualify, if the appraisal comes in under the price, if they change their mind and let the financing lapse. A share of deals die exactly there, after months of waiting, and the house goes back on the market with time on it. We are not borrowing anything, so there is no lender to satisfy, no appraisal to come in low and no contingency to exercise.
| Listing with an agent | Selling to us | |
|---|---|---|
| Sale price | $611,250 (Amityville median) | Our written offer |
| Commission | −$30,563 | None |
| Seller closing costs | −$12,225 | We can cover them |
| Repairs before listing | Out of pocket | None |
| Cleanout | Yours | Ours |
| Showings | Until it sells | One visit |
| Listed to signed contract | 35 days (Amityville median, once listable) | 24 hours to a written offer |
| Contract to closing | 45 to 60 days (waiting on the buyer's lender) | A date you choose |
| Total wait | 80 to 95 days if nothing falls through | Yours to set |
| Can the buyer walk? | Yes (mortgage contingency runs to the end) | No financing to fall through |
| Before repairs and carrying | $568,463 | The number we put in writing |
For the listing side we have used a 5% commission and about 2% in seller closing costs; your real figures may differ. Repairs and carrying costs are left out because they depend on the house. If yours is in good shape, a good agent may well get you more than we would, and we will tell you if so.
What we do not deduct
Just as important as what comes out of the number is what does not. We do not charge a fee for the visit, a fee for the offer, or a commission of any kind. We do not ask you to credit us for repairs we are going to make anyway, and we do not hold back a sum against something an inspection might find, because there is no inspection contingency.
Seller closing costs of about 2%, around $12,225 on a $611,250 sale, are costs we can cover on our side. The figure we put in writing is the figure on the closing statement.
What you do not pay
These are the costs of putting a house on the market through an agent. None of them apply when you sell to us.
- Agent commission
- $30,563 at 5% of the Amityville median none
- Seller closing costs
- About $12,225 on a $611,250 sale. We can cover these. none
- Repairs to make it listable
- Everything a buyer would flag, paid for before you list none
- Cleanout and removal
- Charged by the truckload, and done before the first showing none
- Carrying costs while it waits
- Taxes, insurance and utilities across the 80 to 95 days it takes to find a buyer and then wait on their lender none
Getting a second opinion on our number
We would rather you did. Take the written offer to a local agent and ask for a market analysis, which most will do at no charge. Ask them two things: what the house would fetch renovated, and what it would fetch listed in its current condition today.
If those numbers, minus the commission, minus the repairs, minus the months of carrying it, beat ours, then list it. That is the right answer and we will say so ourselves if we think it is where you are. An offer that only looks good while you are not allowed to check it is not one we want to be making.
Common questions
Will you pay market value?
No, and anyone who says they will is not telling you the truth. We pay below what a renovated house fetches, because we are buying it unrenovated and carrying it. What we are honest about is how far below, and why.
Why not just list it?
Often you should. A house in decent condition in Amityville listed with a good agent will usually beat our number even after the $30,563 commission. The arithmetic changes when the house needs work, when you cannot wait 80 to 95 days, or when a buyer's mortgage falling through would be a disaster for you.
Can I get the offer in writing?
Yes, always, and within 24 hours. Not a range, not a "we can probably do around". A figure you can take to an attorney or an agent for a second opinion.
Do you lower the price later?
No. What we put in writing is what we close at.
Do you publish a formula?
No, and be careful with anyone who does. A published equation applied to a house nobody has walked is a marketing device, not a valuation. What we will do is explain every input that goes into your number and answer questions about any of them.
What if I think the number is too low?
Tell us why, and show us what you are comparing it to. Sometimes the comparison is a renovated house and the gap is the work, which we will walk you through. Sometimes you know something about the property we did not, and the number moves. Either way, take it to an agent for a second opinion first.