What is the Risk Cost Index (RCI) — our Certainty Discount?
In simple terms, RCI is the “Certainty Discount.” It’s the part of your price that pays us to take on risk, friction, and “what-ifs” so you don’t have to. When there are fewer unknowns—clean title, clear occupancy, realistic repair plan—that discount shrinks and your estimated net goes up.
- Market Strength Score: stronger market usually means we can make a stronger offer.
- Complexity Score: more moving parts means a bigger discount; simplifying the deal helps your net.
- Certainty Discount Score (RCI): higher score = bigger discount; lower score = better net to you.
- Put differently: we’re buying the risk from you at a discount so you can move on with less drama.
For partners and analysts, here’s how we model RCI under the hood and how it flows into the Certainty Adjustment on your offer.
Plain-English formula (with the “So what?”)
- LESI (Market Stability Score): fLESI = 1 − (LESI ÷ 100) — higher LESI means a more stable local market, so we can usually make a stronger offer.
- FOS (Friction of Sale Score): fFOS = FOS ÷ 100 — higher FOS means more moving parts (title, occupancy, repairs), so the discount has to be bigger.
- Add-ons: TitleRisk, OccupancyRisk, RepairVolatility, LiquidityShock (0–1) — these capture property-specific “gotchas” that can slow or kill a closing.
Composite: RCI = Σ(weights × factors) + (market × friction interaction). Method public; parameters private to protect accuracy and fairness.
What does RCI actually change for you?
Your Certainty Adjustment is tied directly to RCI. When you lower risk (ID verification, prelim title, vacancy, minor repairs), your RCI drops and your estimated net improves.
- Cash Offer: fastest path; largest Certainty Discount (RCI adjustment).
- Partner Sale (Novation): joint sale structure; smaller discount; net is often above cash while remaining below a typical as-is list estimate.