How The Process Works
Tell Us About Your Property
It’s efficient, easy, and free!
We’ll present you w/ a no-obligation offer
We’ll contact you to discuss our offer.
We Close at a local reputable title company
Payment in your hand in as little as 7 days!
How Do We Determine Your Offer?
Great question! Let’s break down how we come up with a fair offer using a real-life example. Several factors influence a home’s value, including:
- Condition: The overall state of the property is crucial.
- Location: Is it near busy roads, railroad tracks, or industrial areas? Or maybe close to a pond or lake?
- School District: This can also affect the value.
All these elements contribute to determining a property’s worth. However, valuing a property is somewhat subjective. If you were to ask 100 appraisers to assess a single house, their valuations would typically fall within a 10% range. For example, if a house is worth $200,000, appraisals might range from $190,000 to $210,000. For a $400,000 property, the range might be between $380,000 and $420,000.
To arrive at an educated estimate, we analyze comparable sales in the neighborhood. We look for recently sold properties similar in location and condition to what your home will be after any necessary repairs or renovations..
Our Offer Calculation Explained
Our offers are based on a straightforward formula:
Your Offer = ARV (After Repaired Value) – Repair Costs – Holding/Purchase Costs – Selling Costs – Minimum Profit
Breakdown of the Offer Components
1. ARV (After Repaired Value)
This represents the estimated value of your home once all repairs and updates are completed. It’s similar to the appraised value, but we must first make those improvements.
2. Repair Costs
When you fill out one of our forms, we ask basic questions about your home’s condition (like the age of the furnace, windows, roof, etc.). During our walkthrough, we assess what needs updating or fixing and calculate these repair costs using our current pricing.
3. Holding/Purchase Costs
These vary by property and include expenses related to purchasing and maintaining the home during renovations. Costs like taxes, insurance, utilities, and any regular expenses homeowners incur are included here.
You might wonder why there are costs even without agents involved. In Minnesota, we incur expenses such as title insurance, transfer tax, closing costs, and municipal fees on any property transfer. While these costs are typically the seller’s responsibility in a traditional sale, we cover them for you—typically amounting to 3-6% of the ARV.
4. Selling Costs
Although we don’t use agents to purchase your home, we do incur costs when we sell it, including agent commissions and closing fees. These usually add up to around 9-10% of the ARV, which you avoid by selling to us.
5. Minimum Profit
We need to make a profit to sustain our business and support our community. Our minimum profit is $20,000 or 10% of the ARV for larger rehabs. We believe in a win-win scenario: the more offers we accept, the more homes we can improve, benefiting everyone involved.
In Summary
The final offer is calculated by taking the ARV (post-repairs value) and subtracting all associated costs, which leads us to your offer. Regardless of your situation, we strive to provide the highest offer possible while still covering our costs and making a profit.
Calculating Your Home’s ARV in the Twin Cities
The ARV is based on analyzing similar homes in your area that have recently sold.
Defining “Similar Properties”
Consider a neighboring home that is similar to yours—a rambler with three bedrooms, two full baths, a finished basement, and a two-car garage. If your neighbor invested in a new kitchen, updated a bathroom, and made other renovations, and sold for $250,000, your home might also reach that value with similar improvements.
Current Value Assessment
However, the current (AS-IS) value of your home without any repairs might be lower. For example, while your neighbor’s home sold for $250,000, your home might only be worth $170,000 in its current state.
So, My House in Its 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 neighbor’s 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, $170,000.
Real-Life Example: How We Calculate an Offer
Adding It All Up:
- ARV: $250,000
- Repairs Needed: $50,000
- Purchase/Holding Costs: $10,278
- Selling Costs: $17,367
- Minimum Profit: $25,000
Your Offer: $250,000 (ARV) – $50,000 (Repairs) – $10,278 (Holding Costs) – $17,367 (Selling Costs) – $25,000 (Minimum Profit) = $147,355
Why Choose Us?
This calculation shows our offer is based purely on numbers. Even if you’re in a tough spot, we don’t lowball or exploit your situation. Many of our clients simply prefer not to navigate the traditional selling process with agents.
What About Listing As-Is?
You might be wondering about listing your house as-is with a real estate agent. If your home’s AS-IS value is assessed at $167,000, consider the selling costs you’d incur (approximately 9-10% or $16,700) and holding costs (around $4,740).
Net Profit Calculation: $167,000 (AS-IS Value) – $16,700 (Selling Costs) – $4,740 (Holding Costs) = $145,560 Net Profit.
Comparison of Options
When you compare our offer of $147,355 to the net profit of $145,560 from an as-is sale, you can see a difference of $1,795. Plus, we can close in 24 days without repairs, inspections, or cleaning—allowing you to leave behind any unwanted furniture.
In short, our process is straightforward and focused on getting you the best value possible without the hassle of traditional selling.
Contact us today to get your offer!
Selling Your Minneapolis Home Can Be an Efficient and Easy Process
REC Property Group buys houses in and around Minneapolis (and other areas too!). We’re not listing your house… we’re actually the ones buying your home. Because we pay and are buying your Minneapolis home directly, we’re able to close immediately… or on your schedule.
As we’ve mentioned, when you work with us there are no fees and no commissions… like there are when you list your house with an agent. What this means to you is you don’t have to worry about extra costs, having to come out of pocket to sell your house instantly, or even getting your house ready for a sale (we’ll buy your house as-is).
Don’t worry about repairing or cleaning up your property. We’ll buy your house in as-is condition… no matter how ugly or pretty it is… no matter the location.
What Does “As-Is” Mean?
We buy your Minneapolis home in as-is condition… meaning you don’t have to worry about doing repairs, fixing your home up, or getting it ready for showings. We’ll handle all repairs, inspections, etc. after we purchase your home. We’ll factor this into our offer, of course, but it saves you the money and the headache associated with getting your home ready to sell.
What Does “All Price Offer” Mean?
All price means exactly that – all prices. Because we are real estate investors who are purchasing your home directly, we don’t rely on traditional financing like retail homebuyers. When you sell to us, there’s no risk of financing falling through or closing being delayed. When we make you an offer, that’s the full amount you’ll receive if you sell us your Minneapolis home.
How “Instant” is the “Instant Losing?”
After you send us information about your home, we can make you a no-obligation, fair offer in as little as 24 hours. After that, we can close at a local, reputable title company in as little as 7 days. Compare that to the 30+ days it can take to close when listing your house the traditional way, and the benefits are obvious!
What If I Don’t Need An “Instant Closing?”
At REC Property Group, we work on your time frame. If you don’t need an instant closing due to the need to make arrangements, explore your future options, etc. – we can schedule the closing on the day that works best for you!
Will I Get A Low-Ball Offer?
Our goal is to provide you with the fairest offer possible. Unlike other buyers or the big tech giants, we’re transparent with how we arrive at an offer amount. What we offer is based on what the value of the property may be once we make the necessary improvements and upgrades. We’re entirely transparent with this offer process and happy to walk you through how it works.
Is this Even Legit?
Yes – the real estate industry is rapidly changing, and thousands of Americans are exploring their options when it comes to selling their house immediately, the easiest, and in the most transparent way. That’s where we come in. We offer an alternative for those who may not have the time or ability to list their house on the market for top dollar. We’ll work with you to assess your situation, make you a transparent fair offer, and close on your timeline.