How a Cash Offer on Your House Is Calculated

The four numbers, and nothing else

Strip away the branding and every cash offer in Texas is the same piece of arithmetic.

The first four are estimates about the real world and can be argued with evidence. The fifth is a business decision. Keeping them separate is the most useful thing you can do when you are handed a number, because it tells you which parts of an offer are worth negotiating and which are simply the buyer telling you what they need to make.

The rest of this page takes them one at a time.

Number one: what it would sell for repaired

This is the foundation, and if it is wrong then everything built on it is wrong. It is an estimate of what your house would fetch on the open market after the work is done, and it comes from closed sales of genuinely comparable homes: similar size, similar age, similar condition, similar lot, close by, and recent.

Three things make a comparison weak, and all three are worth asking about.

• Distance. A sale two miles away in a different subdivision, with different lot sizes and a different build era, is a weaker comparison than a sale on your street, even if the houses look alike in a photograph.
• Age of the sale. A sale from eighteen months ago describes a different market than a sale from last month.
• Condition. This is the one that gets skipped. If the comparable sold already renovated and yours is being valued as renovated, that is a fair comparison. If the comparable sold in rough condition, it is evidence about rough condition, not about the repaired number.

Ask for the addresses, the sale dates and the adjustments. Not a range, not a neighborhood average, and not an automated estimate from a website: the specific sales, and what was added or subtracted for each difference. A buyer who has actually done the work has this on a page and can hand it over. A buyer who cannot produce it has either not done it or does not want it examined.

Why your appraisal district value is not that number

Almost every seller starts here, because it is the one number about the house that arrives in the mail. It is not the repaired resale value, and it is not what a buyer will pay. Three features of Texas law explain why.

It is a January 1 snapshot. Tax Code section 23.01(a) provides that, except as otherwise provided by that chapter, all taxable property is appraised at its market value as of January 1. By the time you are reading an offer in October, that figure describes a market nine months gone. Keep the opening qualifier in mind too, because chapter 23 is largely made of exceptions, which is one reason a notice can read well below what a house would actually fetch.

It is a mass appraisal. Section 23.01(b) requires mass appraisal standards to comply with the Uniform Standards of Professional Appraisal Practice, and it also requires that each property be appraised based upon the individual characteristics that affect its market value, with all available evidence specific to that property taken into account. In practice a district values thousands of homes at once from the data it holds. It has no way of knowing that your kitchen was redone in 2023 or that the foundation has moved, unless somebody told it.

If you have owned it a while, the figure may be held down by the homestead cap. Tax Code section 23.23 caps the appraised value of a qualifying residence homestead at the lesser of its market value or the sum of three things: 10 percent of the preceding year’s appraised value, that preceding year’s appraised value, and the market value of any new improvements. The limitation takes effect on January 1 of the tax year following the first year the owner qualifies, and it expires on January 1 of the first tax year in which neither that owner nor that owner’s spouse or surviving spouse qualifies. A house held for a decade can therefore carry an appraised value meaningfully below market, and that gap is an artifact of the cap, not evidence about your house.

The flip side is worth knowing because it affects whoever buys from you: the seller’s cap ends at the sale, so the value resets toward market and the new owner’s own cap does not begin until the January after their first qualifying year.

In Bell County the office that does this work is the Tax Appraisal District of Bell County, which both appraises property and collects the taxes for local taxing units. Its notice of appraised value is due by April 1, or as soon thereafter as practicable, for a single-family residence that qualifies for a homestead exemption under section 11.13, and by May 1, or as soon thereafter as practicable, for other property. It is not automatic every year. Tax Code section 25.19(a) requires the notice only where the appraised value is greater than it was in the preceding year, is greater than the value the owner rendered, the property was not on the appraisal roll in the preceding year, or an exemption approved for the preceding year was canceled or reduced for the current year. Section 25.19(e) also lets the chief appraiser, with the approval of the district board, dispense with the notice where the increase in appraised value is $1,000 or less. That notice is useful for exactly one thing in this context: it tells you what the district thinks, which is a starting point for a protest and not a valuation of your house for sale.

Number two: the repair estimate, which is where the disagreements live

This is the largest and most arguable number in the whole calculation, and it is where most of the distance between a seller’s expectation and a buyer’s offer actually sits. The repaired resale value is usually something the two of you can converge on within a few thousand dollars. The repair figure can differ by tens of thousands, because it depends on scope, and scope is a judgment.

A buyer pricing a house to resell is generally not estimating the cheapest fix. They are estimating what it takes to put the house in the condition the comparable sales were in, which is a higher standard than making it work. If your roof has ten years left but looks tired, you may think of that as fine and a buyer may be pricing a replacement, because a tired roof shows up in an inspection report and in a buyer’s lender’s requirements.

There are three ways to test a repair number, in increasing order of effort.

• Ask for it line by line. A single lump sum is not an estimate, it is a conclusion. Roof, HVAC, foundation, plumbing, electrical, flooring, kitchen, baths, exterior: each should carry its own figure. Once it is itemized you can see what is being assumed.
• Ask what standard it assumes. Repair to working order, or renovation to match the comparable sales? Both are legitimate; they produce different numbers, and you cannot evaluate the figure without knowing which one it is.
• Get your own bids. This is the real answer and it costs you nothing but time. Two or three independent contractor bids on the big-ticket items turn the conversation from opinion into evidence. If the bids come in materially under the buyer’s allowance, you have a concrete basis to ask for the difference.

One honest caveat about your own bids: a contractor quoting a homeowner for one job and a buyer budgeting a whole-house turnaround on a schedule are not pricing the same thing, and a buyer who has to finish in weeks rather than months will pay more for the speed. That is a real cost and not a trick. But the gap should be explainable, and if a buyer cannot explain it, that is informative.

Number three: what it costs to hold the house

From the day a buyer closes until the day they sell it again, the house costs money every month whether or not anyone is living in it. This is the component sellers most often forget exists, and it is also the one most often inflated, because it rests on an assumption about time.

The recurring items are property taxes, insurance on a property that may be vacant and under construction, which is a more expensive class of policy than an owner-occupied one, utilities to run the work, lawn and basic upkeep, and interest if the buyer is borrowing rather than using its own funds.

Property taxes are the item you can check yourself, because the rates are published. The Tax Appraisal District of Bell County posts the adopted rates and exemptions for every taxing unit in the county each year, and its own formula is stated plainly: taxable value divided by 100, multiplied by the tax rate. A seller who knows their own annual tax bill knows the single largest monthly line in a buyer’s holding cost.

The assumption to interrogate is the timeline. Holding cost is a monthly figure multiplied by a number of months, and the number of months is a forecast. Ask for both halves. If a buyer is carrying six months of cost into the offer on a house that needs a two-week cosmetic refresh, the arithmetic is doing work that the facts do not support.

For context on local supply, the Texas Real Estate Research Center reported 5.23 months of inventory and 2,693 active listings across the Killeen-Temple metro in August 2026, against the center’s roughly six-and-a-half-month benchmark for a balanced market. Read that figure for what it is: months of inventory measures how much is for sale relative to the rate at which homes are selling, not how long any particular house takes to sell, and it is an area-wide number across all price ranges and property types. If a buyer’s holding-cost timeline looks long to you, the useful challenge is to ask them to justify it against days-on-market figures for this metro rather than against this one.

Number four: what it costs to sell it again

When the buyer resells your house, the buyer is now the seller, and a seller has costs. Those costs come out of the resale price before the buyer sees a dollar, so they are subtracted on the way to your offer.

Some of them are fixed by law and knowable in advance, which makes them easy to check:

• The owner title policy premium is set by the state, not by the title company. Insurance Code section 2703.151(a) directs the commissioner to fix and promulgate the premium rates to be charged for title insurance policies, and section 2703.151(c) provides that, except for reinsurance, a premium may not be charged at a rate different from the rate the commissioner has fixed. Section 2703.202(a) adds that a rate already fixed may not be changed until after a public hearing. So the policy premium is the same figure wherever the closing happens, and there is no version of this cost a clever buyer gets cheaper.
• What varies is some of what sits around it. Endorsements, courier and wire charges and similar add-on items are not the promulgated premium and do differ between companies. Be aware, though, that the Texas Department of Insurance rate rules define the basic premium as covering title examination and closing the transaction as well as the insurance itself, so a separate escrow or settlement line is a narrower item than it looks. Shopping a title company is mostly about service and those add-on charges, not about the premium.
• There is no percentage-of-price transfer tax in Texas. Article VIII, section 29 of the Texas Constitution, added in 2015, provides that after January 1, 2016 no law may be enacted imposing a transfer tax on a transaction conveying fee simple title to real property. It expressly does not prohibit a general business tax measured by business activity, a tax on the production of minerals, a tax on the issuance of title insurance, or a change in the rate of a tax that was already in existence on January 1, 2016. So the carve-outs matter, and what the section bars is the enactment of a new transfer tax rather than guaranteeing that nothing of the kind could ever exist. The percentage-of-sale-price tax that sellers in other states budget for does not exist here.

Then there are the allocated costs, and these are negotiated rather than given. On the standard resale form, TREC No. 20-19, who pays for the owner policy is a checkbox in paragraph 6A, filled in with the offer; the survey is handled in paragraph 6C through three alternatives, each with its own deadline; and paragraph 12A(1)(a) lists the seller’s expenses as releases of existing liens including prepayment penalties and recording fees, release of the seller’s loan liability, tax statements or certificates, preparation of deed, one-half of escrow fee, and other expenses payable by the seller under the contract. Paragraph 12A(1)(b) adds one more seller item that is easy to overlook: a capped dollar amount the seller agrees to apply to the buyer’s expenses, which is the seller concession, and paragraph 12C then directs that amount first to any charge a governmental loan program forbids the buyer to pay.

Brokerage compensation on a resale is its own line, and paragraph 12B of that form states it directly: brokerage compensation is not set by law and is fully negotiable, and each party pays its own broker under a separate written agreement. The paragraph then adds two checkboxes that are easy to miss. Under 12B(1) a seller can agree to pay a stated dollar amount or a percentage of the sales price toward the compensation the buyer owes the buyer’s broker, and under 12B(2) a buyer can do the same for the seller’s broker. Those contributions are paid at closing and do not change what either party already owes its own broker, so on a listing your brokerage cost can have two parts and both of them are negotiated. If a buyer’s resale-cost estimate carries a commission figure, ask what it is based on. It is not a fixed rate, and it is not a number anybody is entitled to assume.

The margin, and why we will not quote you a percentage

After the four estimates, what remains is the buyer’s margin. It is not regulated, it is not disclosed anywhere by default, and it varies by buyer, by house and by how much uncertainty the buyer is absorbing. It is the price of the certainty you are being offered: no financing to fall through, no appraisal to come in low, no repair negotiation, no showings, and a closing date you largely choose.

Whether that trade is worth it is a question only you can answer, and the answer legitimately differs between two people with identical houses. What should not differ is your ability to see the number. A buyer who shows you the four estimates has, by subtraction, shown you the margin as well. That is the point of asking for the arithmetic.

We will not publish a percentage on this page, and we would encourage you to distrust any buyer who does, for one simple reason: a percentage is calculated after the fact from the four numbers, so quoting one in advance means the four numbers were decided before anyone looked at your house. The gap between a cash offer and open-market value is the cost of the repairs, the holding and resale costs and the margin for risk. On a house that needs a roof it is one figure. On a house that needs everything it is a very different figure. The percentage is the output, never the input.

What a cash offer does not subtract

The offer number is lower than a list price, and comparing those two numbers directly is the mistake that costs sellers the most clarity. They are not the same kind of number. A list price is a hope with costs still to come out of it; a cash offer is closer to a net figure already.

Here is what each route actually takes off the top on your side of the transaction:

Prorations are worth understanding because they apply either way. Paragraph 13 of the TREC resale form prorates taxes for the current year, interest, rents and regular periodic maintenance fees, assessments and dues through the closing date, allows the calculation to take into account any change in exemptions affecting the current year’s taxes, and obliges the parties to adjust the prorations once the actual tax statements for the year are available. That last clause is a live obligation after closing, not a formality. And if the taxes are not paid at or prior to closing, that form puts the current year’s taxes on the buyer.

Net to you is the only comparison that matters

Once you see the table above, the right question stops being “is this offer below market value” and becomes “what do I actually walk away with, on what date, after how much work.” Those are different questions and they frequently have different answers.

Build both columns on paper. On the listing side, start from a defensible list price, then subtract the repairs you would do first, the brokerage compensation you agree to, the title and survey charges allocated to you, your loan payoff, prorated taxes, and any repairs or concessions negotiated after an inspection. On the cash side, start from the offer and subtract your loan payoff and prorated taxes. Then put a date next to each total, because a figure in March and the same figure in September are not worth the same to someone who has already moved.

Two sellers can run that arithmetic honestly and reach opposite conclusions. If the house is in reasonable condition and you have time, the open market has more buyers in it and more buyers usually means a higher price; that is the whole reason listings exist. If condition, speed, privacy or certainty matter more to you than the last several thousand dollars, the cash column can win on the terms that actually bind you. Our own cash offer compared with a traditional listing page works through that choice in more detail, and it is written to talk you out of a cash sale where a listing plainly serves you better.

What we would ask is that you do not decide it on the headline numbers alone. A seller who takes a cash offer without ever pricing the listing route has guessed, and a seller who refuses one without netting it out has also guessed.

Is the buyer actually buying it, or assigning it?

This question changes the arithmetic completely, and it is the one most sellers never think to ask. Some of the people who make cash offers do not intend to buy your house at all. They intend to sign a contract with you and then sell that contract to someone else, for a fee. The practice is usually called wholesaling.

Wholesaling is lawful in Texas. What the law regulates is the disclosure, and it does so through two statutes that have to be read together.

• Occupations Code section 1101.0045(a) permits a person to acquire an option or an interest in a contract to purchase real property and then sell that option or assign that contract without a real estate license, provided the person does not use the option or contract to purchase to engage in real estate brokerage and discloses in writing the nature of the equitable interest to any seller or potential buyer. Subsection (b) is the consequence: doing it without that written disclosure is engaging in real estate brokerage.
• Property Code section 5.0205 supplies the timing the Occupations Code does not. Before entering into a contract to sell an option or assign an interest in a contract to purchase real property, a person must disclose in writing to any potential buyer that the person is selling only an option or assigning an interest in a contract and does not have legal title to the real property, and to the owner of the real property that the person intends to sell an option or assign an interest in a contract.

So you are entitled, as the owner, to a written disclosure of that intention before it happens. The practical way to get it early is to ask the question in writing at the offer stage: do you intend to assign this contract, and will you put that in the agreement? A buyer who genuinely intends to close has no difficulty saying so.

Why it matters to the number: in an assignment, the fee the wholesaler earns sits on top of everything else. The person who eventually closes still has to make the same four estimates work, and they are now working with a price that includes somebody else’s fee. That fee has to come from somewhere, and the only places it can come from are your price or the end buyer’s margin. It is also why an assigned contract is more likely to be renegotiated or abandoned close to the closing date, because the deal has to satisfy two sets of arithmetic rather than one.

Acting as a broker or sales agent without a license is a Class A misdemeanor under Occupations Code section 1101.758, and section 1101.759 allows the Texas Real Estate Commission, after notice and an opportunity for a hearing, to issue a cease and desist order prohibiting a person from engaging in the activity. That reaches unlicensed persons, which is the relevant point here. If you want to know whether the person in front of you holds a license at all, TREC publishes a license holder search that covers both individuals and organizations and accepts partial values, so a surname or a company name is enough to start. Those are the public remedies, and both depend on somebody else deciding to act. You have one of your own. Because section 1101.0045(b) treats an undisclosed assignment as engaging in real estate brokerage, section 1101.754 makes a person who received a commission or other consideration as a result of acting as a broker or sales agent without a license liable to an aggrieved person for a penalty of not less than the amount of money received and not more than three times that amount, and it provides that the aggrieved person may file suit to recover it. Section 1101.753 gives the Commission a parallel civil penalty recoverable on behalf of the state. Whether either one reaches a particular arrangement is a question for a lawyer rather than for us, but you are not limited to waiting for a prosecutor. Our page on the warning signs of a home buyer scam covers the rest of the checks worth running before you sign anything.

Seven questions that test any cash number

Print these. Ask them of every buyer, including us. The answers, or the reluctance to give them, will tell you more than the headline figure does.

1. What did you assume the house is worth repaired, and which closed sales did you use? Addresses, dates and adjustments.
2. What is your repair figure, broken out by item, and does it assume repair or renovation? A lump sum is not an answer.
3. How many months of holding cost are in this offer, and what is the monthly figure? Both halves, because the months are a forecast you can challenge.
4. What resale costs did you subtract, and what commission rate did you assume? It is not set by law.
5. Do you intend to assign this contract to another buyer? Ask for the answer in the written agreement, not in a phone call.
6. Who is the escrow agent, and where does my earnest money go? It should go to a third-party escrow agent, not to the buyer.
7. What would you tell me to do if you were not buying it? A buyer who cannot name the circumstances in which you should list instead is not giving you advice, they are closing you.

How we arrive at our own number

The same four estimates, in the same order, and we will walk you through them for your house rather than quoting you a fraction of anything. We research before we talk numbers: comparable sales, the appraisal district record, the plat, and anything unusual such as an odd lot line, an easement or a lien showing in the deed records. Then we look at condition, often in a conversation and sometimes in a walkthrough. The detail of each step is on our how our process works page.

Two things are worth stating plainly about what you get. A written evaluation from us tells you what the house could realistically sell for on the open market and what preparing it would involve, and a direct cash figure only if you want one. It is free, and it does not obligate you to sell, to list or to speak to anyone again. If the honest answer is that listing serves you better, that is what the evaluation will say, and if the honest answer is that staying put serves you better, it will say that too.

What we will not do is price your house against a deadline, present a percentage in place of the arithmetic, or tell you a cash sale is your best option when a listing plainly would be. The fuller version of that list, including the information no legitimate buyer needs from you in order to produce a number, is on the process page above.