What is the risk-adjusted value of an offer and how do I calculate it?
Multiply the offer price by the estimated probability of successful closing. A $2.2M offer with multiple contingencies and borderline financials might have a 55% closing probability, yielding a risk-adjusted value of $1.21M. A $2.05M all-cash offer with no contingencies at 95% probability yields $1.95M. The "lower" offer is worth $740,000 more in risk-adjusted terms - and that calculation does not include wasted carrying costs from a failed deal.
This article provides general educational information only. It is not legal, tax, financial, insurance, compliance, housing, brokerage, or professional advice. Rules, tax rates, obligations, enforcement practices, and market conditions vary by property, building, contract, municipality, and jurisdiction, and they change. Sellers should consult a qualified attorney, CPA, or other appropriate professional before making decisions based on their specific situation.
From the seller playbook: The Clean Offer
This is general information, not legal, tax or accounting advice. Every situation is different. Talk to a licensed attorney, accountant or tax professional before you act.
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