← Back to BlogMay 20267 minDan White
Max Allowable Offer Calculator — Free Real Estate Tool
The max allowable offer (MAO) is the highest price you can pay for a property and still hit your profit target. It is calculated before you make any offer — and it determines whether a deal is worth pursuing at all.
Market Context
Live Market Data
Washington, DC Housing Market
Cool Market
Data through Mar 2026
Median Sale Price
$590,000
+0.8% YoY
Median Days on Market
44 days
lower = faster market
Sale-to-List Ratio
99.7%
buyers' market
Homes Sold
4,457
last reported month
Source: Redfin Data Center. Updated monthly. Data reflects Washington, DC residential sales.
redfin.comThe MAO Formula
MAO = (ARV × 0.70) − Rehab Costs
Multiply ARV by 0.70, then subtract your estimated renovation cost. That's your maximum purchase price. If the seller won't go below that number, walk away.
What the 30% Margin Covers
- Buying closing costs: 1–3% of purchase price
- Hard money financing: 10–13% annual rate + 1–3 points
- Holding costs: insurance, taxes, utilities during renovation
- Selling costs: 5–6% agent commission + closing costs
- Profit: whatever remains after all of the above
Calculate Your MAO Free
Freddie calculates your exact MAO using Rentcast ARV data — plus the full cost breakdown showing where every dollar goes. Free.
Get My MAO Free →When to Tighten the MAO to 65%
Use 65% instead of 70% when: hard money rates are above 12%, your expected hold is over 9 months, the rehab scope is uncertain, or the market is softening. The extra cushion absorbs the higher costs and protects your profit if the deal runs long.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been investing in real estate for 20+ years.