Who buys houses for cash?
Short answer
Four different kinds of business, all advertising with the same words. iBuyers, national franchises, local investors, and wholesalers. They pay differently, close differently, and only one of them might not actually be buying your house. Knowing which one you are talking to tells you what their promises are worth.
The question of who buys houses for cash has four answers, and the marketing deliberately blurs them. Every one of these will tell you they buy houses fast, for cash, in any condition. What differs is where the money comes from, and that determines whether the closing date you were promised is real.
iBuyers: Opendoor, Offerpad and similar
Large venture-funded companies making algorithmic offers from public data, usually before anyone has seen the property. They move quickly and the process is slick, and they are genuinely buying with their own money.
Two things to watch. They charge a service fee, typically comparable to an agent commission, which means the headline offer is not what you net. And because the first number comes from an algorithm rather than a visit, it is commonly revised downward after inspection. They also concentrate on newer, uniform housing in large metros and will simply decline anything that needs real work, which excludes most of the houses people want to sell this way.
National franchises: HomeVestors and similar
A recognizable national brand where the person who actually turns up is an independently owned local franchise. The marketing is national; the buyer, the money and the standards are local.
That means experience varies enormously between territories, because you are not really dealing with the brand, you are dealing with whoever bought the franchise for your area. The brand does give you something real though: a corporate entity that cares about complaints, which is more recourse than an anonymous LLC offers.
Local investors buying with their own funds
Individuals or small companies who buy, renovate, and then sell or rent. Usually the least polished process and frequently the most straightforward, because the person quoting is the person paying and the person who has to live with the renovation.
The variance here is the widest of the four. Some are excellent and have closed hundreds of houses. Some closed their first last month. The checks matter most in this category, which is why they are worth doing rather than assuming.
Wholesalers: the one that is not buying your house
A wholesaler puts your house under contract and then sells that contract to somebody else, taking the difference as an assignment fee. It is legal in most states and not inherently dishonest, and a good wholesaler with a real buyer list closes reliably.
The structural risk is specific and worth understanding. Their ability to close depends on finding an end buyer at their number. If they cannot, the pressure moves to you: the closing date slips, an inspection suddenly surfaces problems, the price comes down. When people describe being messed about by a cash buyer, this is usually the mechanism.
You can settle it with one question, asked plainly: are you buying this yourself, or assigning the contract? A straight answer is fine either way. A dodge is the answer.
Which is likely to pay most
There is no fixed ranking, and anyone claiming one is selling something. Roughly: iBuyers can pay more for newer houses in good condition in big metros, and will not touch anything else. Local investors can pay more for houses needing real work, because they are set up to do the work rather than to avoid it. Franchises sit between the two and vary by operator. Wholesalers have to leave room for their fee and the end buyer's margin, so their number carries an extra layer.
Which is why getting more than one offer is worth the hour it takes. Just be aware that several of the calls you get from a single form may be the same lead resold by a broker, rather than genuinely competing buyers.
Ask which of the four they are
Straightforward question and a reasonable one. The answer changes what their closing date is worth.
Ask whether they are the buyer or a lead generator
Many websites in this category are not buyers at all. They collect your details and sell them, which is why one form produces a dozen calls.
Ask what happens if their end buyer walks
Only wholesalers have an end buyer. If the answer describes one, you have learned what you needed to know.
Common questions
- Who pays the most for a house in cash?
- It depends on the house. iBuyers can pay more for newer properties in good condition in large metros, and decline everything else. Local investors are usually stronger on houses needing significant work. There is no type that always pays more, which is the argument for getting more than one offer.
- Are Opendoor and Offerpad cash buyers?
- Yes, they buy with their own funds. They also charge a service fee comparable to an agent commission, so compare their offer net of that fee rather than on the headline number, and expect the initial figure to be revised after inspection.
- How do I know if someone is a wholesaler?
- Ask directly whether they are buying it themselves or assigning the contract. Other signals are a contract with an assignment clause, reluctance to provide proof of funds in their own name, and an unusually long inspection period.
- Which type of cash buyer is safest?
- Safety comes from the checks rather than the category. A named individual buying with their own funds, using a title company you can ring, who will tell you when listing would be better, is safer than a polished brand that will not answer those questions.
Point this checklist at us
Everything above is written so you can apply it here. We are the buyer, not a lead broker, so your details are not sold on. We will tell you the comparables and the repair figure behind any number we give you. And if listing would net you more, we will say so rather than take the deal.
Ask us what we would pay, then check us against this page
It takes about two minutes, there is no obligation, and there is never a fee. If we are not the right answer for your situation, we will tell you that too.