Cash Buyers vs iBuyers: Who Pays More in California?
If you need to sell quickly in California, you’ll see two fast paths: cash buyers and iBuyers. On paper, both look simple. However, the real question is this: who actually nets you more after fees, repairs, and time? In this guide, we compare both options, walk through real‑world trade‑offs, and link to authoritative resources—so you can decide confidently.
- Cash Buyers vs iBuyers: What’s the Difference?
- What Really Matters: Net Proceeds, Not Headline Price
- Fees, Repairs, and Credits: Side‑by‑Side
- Timing & Certainty: Appraisals, Financing, and Delays
- California Market Nuance: LA, Bay Area, Inland Empire & More
- Eligibility & Coverage: Where iBuyers Operate (and Where They Don’t)
- Decision Checklist & Sample Net Sheets
- FAQs and Authoritative Resources
Cash Buyers vs iBuyers: What’s the Difference?
Cash buyers are local or national investors who purchase homes as‑is using cash or hard money. Because they don’t depend on traditional financing, they can close fast and absorb issues like repairs, tenant problems, or probate timelines. Meanwhile, iBuyers are tech‑enabled platforms that generate offers online, charge a service fee, request repair credits after inspection, and then resell the property—often after light renovations—to a retail buyer.
To understand why this matters, consider downstream risk: iBuyers ultimately must resell to a financed buyer, so appraisal and market volatility still affect their model. By contrast, a direct cash buyer removes most financing risk up front and, therefore, delivers more certainty.
Cash Buyers: Quick Snapshot
- As‑is purchase; no repairs or showings
- Flexible close (often 7–21 days)
- Can handle liens, code issues, or probate
- Typically cover most closing costs
iBuyers: Quick Snapshot
- Online quote with standardized fees
- Inspection → repair requests/credits
- Coverage limited to select ZIP codes
- Must resell; exposed to appraisal risk
What Really Matters: Net Proceeds, Not Headline Price
Because fees, repairs, and time all subtract from your bottom line, the right comparison focuses on net, not just the headline offer. Consequently, two “similar” offers can net thousands apart once you account for a month or two of mortgage interest, taxes, insurance, utilities, HOA dues, and maintenance. Therefore, build a side‑by‑side net sheet before deciding.
| Line Item | Cash Buyer | iBuyer | Why It Matters |
|---|---|---|---|
| Service/Platform Fee | None | Often charged | Directly reduces your net |
| Repairs/Credits | Usually $0 (as‑is) | Requested after inspection | Can be thousands; also delays |
| Closing Costs | Often covered by buyer | Varies by company | Title, escrow, transfer taxes add up |
| Time to Close | 7–21 days typical | 30–60+ days typical | Carrying costs & market risk increase with time |
| Eligibility | Statewide, flexible | Select metros/ZIPs only | Coverage affects availability & pricing |
| Certainty | High (no financing risk) | Moderate (must resell) | Fewer surprises = smoother process |
Because California has high taxes, insurance, utilities, and HOA dues in some communities, even a few extra weeks on market can be expensive. For reference, review California Franchise Tax Board guidance on state taxes and consult a CPA about capital gains and potential depreciation recapture if you’re selling a rental.
Fees, Repairs, and Credits: Side‑by‑Side (Illustrative)
Below is a simplified example. Your numbers will differ by county, HOA rules, condition, and current demand. Nevertheless, this shows how “higher” offers can net less after fees and credits.
| Cash Buyer | iBuyer | |
|---|---|---|
| Headline Offer | $700,000 | $720,000 |
| Platform/Service Fee | $0 | -$18,000 (2.5%) |
| Repair Credit (post‑inspection) | $0 | -$12,000 |
| Closing Costs (title/escrow/transfer) | Buyer covers (est. $0 to you) | – $4,500 |
| Carrying Costs (extra 45 days) | ~ $0 (fast close) | – $5,000 |
| Estimated Net | $700,000 | $680,500 |
Timing & Certainty: Appraisals, Financing, and Delays
In California’s competitive markets, time kills deals. Because financed buyers depend on appraisals and underwriting, they introduce delays and re‑negotiations. Consequently, when an iBuyer goes to resell your house, appraisal gaps can still affect the outcome—potentially leading to price changes or extended days on market. Therefore, if you value certainty over a small spread, a direct cash sale can be compelling.
For a sense of rate sensitivity and demand, explore: Freddie Mac PMMS, Redfin Data Center, Zillow Research, and FHFA House Price Index (CA).
California Market Nuance: LA, Bay Area, Inland Empire & More
California is not one market—it’s many. Because buyer pools vary, the same house can perform differently across regions:
- Los Angeles & Orange County: Diverse buyer profiles, HOA prevalence in condos, and strict retrofit/point‑of‑sale rules in some cities. See your local city pages and LA Department of Building and Safety for permits.
- Bay Area: Highly seasonal demand; disclosures and local transfer taxes matter. Also see San Francisco and Alameda County resources.
- Inland Empire & Central Valley: Affordability draws buyers; appraisal sensitivity can be higher when rates spike. Check Riverside and Fresno portals for local items.
- San Diego & Sacramento: Strong military/government presence in some submarkets; disclosure and water/energy retrofit rules vary by city. See San Diego and City of Sacramento.
For statewide compliance, always verify with: California Department of Real Estate, CA Attorney General — Consumers, and California Courts Self‑Help.
Eligibility & Coverage: Where iBuyers Operate (and Where They Don’t)
iBuyer programs expand and contract. Because costs of capital, inventory risk, and local seasons matter, coverage is not permanent. Consequently, always check the latest coverage pages: Opendoor, Offerpad. For industry analysis, also see Mike DelPrete’s iBuyer research.
If your home needs work, has tenants, or involves probate/divorce, iBuyers may decline; a direct cash buyer can still purchase and coordinate with title, attorneys, or occupants.
Decision Checklist & Sample Net Sheets
Quick Checklist
- Do I need an as‑is sale with no repairs, showings, or clean‑outs?
- Is my timeline flexible, or do I need a guaranteed close date?
- Are there liens, tenants, probate steps, or HOA issues?
- What’s my true net after fees, credits, taxes, and carrying costs?
- Am I inside an iBuyer coverage ZIP? If not, what’s Plan B?
How to Build Your Net Sheets
- Start with each headline offer.
- Subtract all service/platform fees.
- Estimate repairs or likely credits (use a contractor or inspector if needed).
- Add closing costs you’ll pay (title, escrow, transfer tax, recording). Check local schedules with your county recorder.
- Estimate carrying costs for your expected timeline.
- Consider taxes with your CPA: capital gains, depreciation recapture (rentals), and any local transfer taxes.
Frequently Asked Questions
Do cash buyers always pay less than iBuyers?
Not necessarily. Because cash buyers skip platform fees and repair credits—and because they cover many closing costs—their net can beat a “higher” iBuyer headline. It depends on your home’s condition, location, and timing.
Will an iBuyer purchase my tenant‑occupied property?
Policies vary and change. If they decline, a cash buyer can often purchase with tenants in place or post‑closing occupancy agreements.
Can I sell during probate in California?
Often yes, with court authority. See California Courts Self‑Help (Probate) and consult a probate attorney.
How many offers should I get?
At least two: one cash and one from any iBuyer that covers your ZIP. Then build net sheets and decide based on math, timing, and certainty.
Authoritative Resources & Further Reading
- California Department of Real Estate (DRE)
- California Association of REALTORS® — Market Data
- National Association of REALTORS® — Research
- Redfin Data Center
- Zillow Research
- Freddie Mac — Primary Mortgage Market Survey (Rates)
- FHFA House Price Index — California
- Bureau of Labor Statistics — West Region
- U.S. Census — American Community Survey
- California Attorney General — Consumers
- California Courts — Self‑Help
- Opendoor (Coverage & Terms) • Offerpad
- Mike DelPrete — iBuyer Industry Research
Browse Our State Guides
Don’t see your state? We still buy there — get an offer and we’ll confirm coverage.
