More sellers are reducing asking prices. Compare the revised price with supported resale value, the full project cost stack and your required profit before making an offer.
What happened
Redfin reports that the share of active home listings receiving price reductions reached a seasonal high in its records. The verified national and metro figures below describe how common price cuts were, not the average size of a markdown.
For a flipper, that can justify another conversation with the seller. It does not establish what an individual property is worth after repairs or what the project can afford to pay.
What this means for your deal
The original asking price is a seller's starting position. Your maximum allowable offer should come from supported resale value, a detailed rehab scope, financing and holding costs, selling expenses, acquisition closing costs and your required profit.
Full-cost MAO = ARV − rehab − selling costs − financing and holding costs − acquisition closing costs − target profit.
A price reduction improves the model only to the extent that the other assumptions still hold. Recheck sold comparables, repair estimates and the likely marketing period before treating the entire discount as additional margin.
Illustrative deal comparison
Illustrative example — not an actual property or investment recommendation.
The scenario assumptions and results below hold the resale value and all non-purchase costs constant to isolate the effect of a seller markdown. The assumed price reduction is a sensitivity test; it is not a market average reported by Redfin.
The lower asking price increases projected profit dollar-for-dollar under these assumptions. However, the revised price still exceeds the full-cost maximum allowable offer. The investor would need a further reduction, an evidence-backed change to the project plan, or a different property to meet the stated target.
Return on project cost means projected profit divided by purchase, rehab, selling, financing, holding and acquisition closing costs. It is not an annualized return, cash-on-cash return or guaranteed outcome. This simplified illustration excludes income taxes and assumes no separate contingency beyond the stated rehab budget; add a property-specific contingency before making a real offer.
The public calculator also describes the classic percentage-of-ARV shortcut. That screening heuristic can differ from a full-cost backsolve because it uses a fixed spread instead of the actual cost stack and target profit.
Before making an offer
- Verify ARV against relevant sold comparables and the planned finished condition.
- Obtain a rehab scope and include a realistic contingency.
- Model financing points, interest, draw timing and a slower exit.
- Include selling costs and acquisition closing costs.
- Compare the revised asking price with your maximum offer and required profit.
- Negotiate again or pass when the revised price remains above the supported offer.
Run your own numbers
Replace every illustrative assumption with the property's supported inputs. Calculate your maximum offer.
Compare negotiation tools in the existing Academy lesson: Price Reduction vs. Seller Concessions.
Published 2026-10-08. Content by FlipCalculatorPro.