The second sentence out of almost every seller’s mouth, after they hear a cash number, is some version of: “That’s not what it’s listed for.” Or what the neighbor sold for. Or what Zillow says. All three of those are real numbers. None of them is the amount that would hit your account if you sold the house as it sits today.
I run acquisitions at Diamond. I am the person who pulls the comps and writes the offer. This is the same explanation I give at the kitchen table, and it uses only the ranges we already publish. It is not a quote for your house.
List price is the top of the funnel
A list price is an asking price. It assumes a retail buyer with a mortgage, a house that will pass that buyer’s inspection and appraisal, and enough time for showings. In a lot of Texas neighborhoods the renovated houses really do close near that number. Your house, with the roof, the foundation, or the kitchen it has today, is not that house yet.
After-repair value — ARV — is the name for what the fixed-up version would sell for. The cash offer starts there and walks backward. If you want the long version of how to pull your own comps, it is in how your cash offer is calculated. The short version:
- Use sold prices, not active listings.
- Stay close and recent — about half a mile, and roughly the last 90 days.
- Match beds, baths, and size.
- Look at what the renovated ones actually closed for. That is the ARV.
Skip the Zestimate and the Redfin estimate for anything inherited, dated, or unusual. Those models are routinely 15–25% off on the houses we buy. A Texas-licensed agent’s CMA is a better second opinion, and it is usually free.
The formula, with no extra percentage bolted on
Every offer I write comes from one equation:
Cash offer = ARV × 75–80% − estimated repairs
A clean house with light cosmetic work — paint, flooring, a cleanup — underwrites higher. For that tier the published band is 85–92% of ARV, before you subtract whatever small repairs are left. A house with a foundation, a full gut, or a thin resale market lands toward 75%, and the repair line itself is larger.
Those percentages are how we build an offer. They are not a guarantee that your house will come in at 80%, or at 92%, or at any other point. Condition and how predictable the resale is move the dial. I will tell you which point I used, and why.
Here is the illustration we already publish, so you can see the shape of the math. It is an example, not an offer.
- ARV from renovated comps: $300,000
- Repairs (kitchen, one bath, HVAC, paint and flooring): $40,000
- Percentage for that moderate, predictable resale: 77%
- $300,000 × 77% = $231,000, minus $40,000 = $191,000
The gap between $300,000 and $191,000 looks enormous until you put the listing costs on the other side. That comparison is the whole next section.
What the discount is actually paying for
People hear “margin” and picture a buyer inventing a fee. The room inside 75–80% (or 85–92% on a clean house) is the cost of taking the house from as-is to resale. We do not add a second, unpublished profit percentage on top of that band. Four things live in it:
- Repairs. The real cost to reach the ARV you just looked up. You are not writing that check.
- Holding. Taxes, insurance, and financing during the months of work. In Texas, property taxes alone run about 2.0–2.4% of value a year.
- Resale risk. If the market is softer when the house is finished, that loss is the buyer’s.
- The commission you skip. A retail sale still pays both sides in most Texas markets. After the 2024 NAR settlement we are seeing 5.0–5.5% total, versus the older 6%. The cash sale does not charge you that commission.
There is no separate Diamond fee on top. There are no agent commissions and no listing fees, and we cover standard closing costs. The number on the written offer is the number you net, aside from your mortgage payoff and any liens the title company has to pay. That is the same answer on the seller FAQ.
When the cash number nets more than listing
Gross offer versus list price is the wrong comparison. The right one is what you walk with, on a date you can actually hit.
Listing leaks money in a fairly predictable order. The cash-versus-listing guide itemizes it for a current Texas sale: pre-listing prep, commission, buyer concessions, seller closing costs, inspection repairs, and the mortgage, taxes, and insurance you carry while it sits. Added up, that guide puts the real cost of an open-market sale closer to 11–15% of the price, before the repairs you paid to get it there. A realistic timeline from yard sign to wire is often 60–110 days, and that assumes the first buyer’s loan closes.
Cash tends to win on net in a few specific situations:
- The repair list is large enough that you would pay for the work and still pay commission on the full retail price. Once repairs get past about 8–10% of ARV, that double hit gets ugly.
- You do not have the months. A foreclosure date, a move, or a sale that already fell through is a different problem than a patient listing.
- You cannot fund the repairs, or you cannot live through showings.
The calculator will run your own numbers. Use it. If the listing column is higher and you have the time, list it.
When listing is the better check
I will say this as plainly as the formula. If the house is move-in ready, the title is clean, the neighborhood actually sells, and you can wait, a listing usually nets more. The clean-house band is 85–92% of ARV for a reason: even an easy resale has holding time and risk, so a cash offer is still a discount to retail. On a house that does not need the discount, do not take it.
That is also the honest read on listing with an agent versus selling to us. An iBuyer is a third path, with its own service fee and a revised number after inspection. If your house fits their box, get the quote. The comparison is on Diamond versus an iBuyer. Most of what we buy does not fit that box.
What to do with a number you do not like
Ask to see the comps. Get the CMA. Run the calculator. Talk to another buyer and make them show the same math. You are allowed to walk.
If you want us to do the comp work, tell us about the house. You get a written offer in 24 hours, with the ARV and the repair lines behind it, and no obligation to take it. The how-it-works page is the rest of the path after that, if the net is the one you want.