Cash Home Buyer vs. iBuyer — What's the Difference?
Not All "Sell for Cash" Options Work the Same Way
If you've researched selling without a realtor, you've probably come across both local cash home buyers and national iBuyer platforms like Opendoor or Offerpad. They sound similar — fast, no repairs, no showings — but the way each one actually operates is quite different, and it affects both the offer you get and how likely it is to change after the fact.
Algorithm vs. Person
iBuyers rely on an automated valuation model — an algorithm estimates your home's value from public data and comparable sales, then generates an initial offer. That offer is typically only available for homes in decent condition, in specific zip codes, and is almost always followed by an in-person inspection that can lower the price significantly.
A local cash buyer evaluates the property directly, in person or through photos and a condition conversation, and gives a number based on what's actually there — not an estimate that gets revised later.
💡 Ask any buyer directly: "Does this number change after inspection?" A legitimate local buyer's answer should be no, or close to it — that's the real test.
How the Two Models Compare
| Typical iBuyer | Royal Groups Realty | |
|---|---|---|
| Service fee | Often 5–6% of price | None |
| Condition requirements | Near move-in ready, specific zip codes | Any condition, any area we serve |
| Price after inspection | Frequently reduced | Rarely changes |
| Who evaluates the property | Algorithm + remote inspection | A person, directly |
| Closing flexibility | Limited windows | You choose the date |
Neither model is inherently a scam — iBuyers are legitimate, publicly traded companies. But their business model depends on strict criteria and post-inspection adjustments, which can mean a lower net than what you were originally quoted.
How to Decide Between the Two
- Get quotes from both. Compare the actual net number, not the headline offer.
- Ask what happens after inspection. If the answer is vague, that's a red flag for a price change later.
- Check if your property even qualifies. iBuyers reject a large share of homes outright — older properties, unusual conditions, or certain zip codes often don't qualify at all.
- Consider your timeline needs. Local buyers tend to offer more flexibility on the closing date.
- Decide based on certainty, not just the first number you see. The best offer is the one that doesn't change.
Why Sellers Choose Royal Groups Realty
If an iBuyer Turned You Down or Lowballed You
Frequently Asked Questions
An iBuyer uses an algorithm to generate an initial offer, often followed by an in-person inspection that can lower the price. A local cash buyer evaluates the property directly and gives a number that typically doesn't change.
Many iBuyers charge a service fee, often in the range of 5-6% of the sale price, in addition to standard closing costs.
Not necessarily. iBuyers typically only buy homes in near move-in condition, within specific zip codes and price ranges, and reject a large share of properties outright.
The initial offer is based on an algorithm and public data. Once an in-person inspection reveals the home's actual condition, the company may reduce the offer to account for repairs.
Both can be legitimate. The difference is business model, not legitimacy — a local buyer evaluates in person up front, which is why the number tends to be more stable.
Compare the net amount you'd actually receive after fees, not just the headline offer, and ask each buyer directly whether the number is likely to change after inspection.