If you've inherited a property in Connecticut, you've probably already received letters or phone calls from cash buyers. The offers can sound appealing — fast closing, no repairs, no showings, no hassle.
But before you respond to any of them, there's something worth understanding: cash buyers follow a specific formula to determine what they'll pay. Once you understand that formula, you'll be in a far better position to evaluate whether a cash offer is a good deal for your family — or whether listing the property would put significantly more money in the estate.
How Cash Buyers Calculate Their Offers — The MAO Formula
Real estate investors almost all use a version of the same calculation, typically called the Maximum Allowable Offer (MAO) formula.
Step 1 — Estimate the After-Repair Value (ARV) What would the property be worth fully repaired and renovated on the open market?
Step 2 — Apply a Profit Margin (typically 70–75% of ARV) This builds in the investor's profit after renovation costs.
Step 3 — Subtract Estimated Repair Costs
The formula: MAO = (ARV × 0.70) − Estimated Repair Costs
What This Looks Like in Real Numbers
A 3-bedroom colonial in Fairfield County needing updates — kitchen, bathrooms, deferred maintenance. Estimated after-repair value: $600,000.
| After-Repair Value (ARV) | $600,000 |
| 70% of ARV | $420,000 |
| Estimated Repair Costs | − $80,000 |
| Cash Buyer's Maximum Offer | $340,000 |
Now compare to a listing scenario for the same property:
| List It | Cash Sale | |
|---|---|---|
| Sale Price | $450,000 | $340,000 |
| Commission | $18,000 | $6800 |
| Closing Costs | $4,500 | $0 |
| Preparation | $8,000 | $0 |
| Net to Estate | $419,500 | $333,200 |
| Timeline | 60–90 days | 21–30 days |
The difference: $86,300. That's approximately 6 months of patience and modest preparation. Whether that tradeoff makes sense for your family is a legitimate question — but it should be a conscious choice, not a default.
When a Cash Sale Actually Makes Sense
A cash offer isn't always the wrong answer. Three situations where it may genuinely be the right path:
Severe property condition. Major structural issues, systems failures, significant water or fire damage — conditions that would make a traditional listing difficult. In these cases the discount reflects real risk, not exploitation.
Speed is genuinely necessary. Back taxes, ongoing mortgage payments, carrying costs that make a fast close the financially rational choice even at a lower price.
All heirs are aligned and choose simplicity. After seeing the honest numbers, some families decide the time and coordination of an open market sale isn't worth the premium. That's a legitimate choice — made with full information.
The key phrase in all three: after seeing the honest numbers.
What Cash Buyers Won't Tell You
Most cash buyers won't explain the MAO formula. They won't show you what the property would sell for on the open market. They won't tell you that listing might net the estate $80,000 or $130,000 more. That's not illegal — but the information gap is real, and the burden is on you as executor to understand both options.
"We pay fair market value" is marketing language. If a buyer is purchasing below ARV (which every investor does by definition), they are not paying fair market value. They're paying investment value — a different number.
Fast closing timelines are features for the investor, not just for you. Make sure speed genuinely serves your needs before treating it as a benefit.
A Note on the Numbers in Fairfield County
Fairfield County is one of the stronger real estate markets in Connecticut. In higher-value towns — Greenwich, Westport, Darien, Ridgefield, New Canaan, Wilton — the gap between what an investor will pay and what the open market will pay is often larger in absolute dollar terms than in lower-priced markets. The percentage discount is similar; the dollar gap is much larger.
Understanding the cash buyer formula matters more, not less, in Fairfield County.
The Question Every Executor Should Ask
Before accepting any offer on an inherited property in Connecticut, ask yourself: "Do I know what this property would sell for if we listed it on the open market?"
If the answer is no, find out. It takes one conversation with a local real estate professional to get a realistic picture. That conversation costs nothing and could be worth tens of thousands of dollars to the estate you're responsible for.
What Heritage Property Group Does Differently
When we meet with an executor, we bring both numbers to the table — what the property would realistically sell for on the open market, and what a cash buyer would likely pay. We don't advocate for one path over the other. Both options generate revenue for us. What we care about is making sure the family is choosing with complete information.
If you have an inherited property in Fairfield County and you've received cash offers — or you're expecting to — we're happy to walk through the numbers with you. No obligation. No pitch. Just an honest conversation.
Heritage Property Group serves executors and families throughout Fairfield County, Connecticut.