Cash buyers and iBuyers both buy homes quickly for cash, but they work very differently. Cash buyers are local investors who buy homes in any condition and focus on helping sellers in tough spots. iBuyers are tech companies that use computers to make offers on homes that are in good shape and located in big cities.
If you need to sell your house fast in Colorado, knowing the difference between these two options can save you money and stress. This guide breaks down everything you need to know about cash buyers and iBuyers so you can pick the right choice for your situation.
What Is a Cash Buyer?
A cash buyer is a person or company that buys homes with cash instead of using a bank loan. These buyers are usually real estate investors, house flippers, or landlords looking to grow their property collection.
How Cash Buyers Work
Cash buyers make the home selling process simple. Here’s what happens:
- You contact them about your house
- They look at your property in person
- They give you a cash offer based on what they see
- You pick when to close (usually 7 to 30 days)
- You get paid in cash at closing
Cash buyers focus on buying homes that other people don’t want. This includes houses that need big repairs, homes in foreclosure, or properties owned by tired landlords.
Who Are Cash Buyers?
Cash buyers include:
- Local real estate investors who know your area well
- House flippers who fix and resell homes
- Buy-and-hold investors who turn homes into rentals
- “We Buy Houses” companies that purchase homes as-is
These buyers work in your community. They understand local market prices and can give you a fair offer based on real knowledge of your neighborhood.
Benefits of Working With Cash Buyers
Cash buyers offer several perks:
- Buy homes as-is: No need to fix anything or clean up
- Fast closing: Close in days or weeks, not months
- No fees: Most cash buyers don’t charge service fees
- Local experts: They know your market inside and out
- Flexible terms: Work with your schedule and needs
- Handle tough situations: Buy homes with title issues, liens, or code violations
Cash buyers also work with sellers facing tough times. Whether you’re dealing with divorce, inheritance, or relocation, local cash buyers understand and can help.
What Is an iBuyer?
An iBuyer is a tech company that buys houses using computer programs and data. The “i” stands for “instant” because these companies can make offers very quickly.
How iBuyers Work
iBuyers use technology to speed up home sales. Here’s their process:
- You fill out an online form with your home details
- Their computer program creates an offer (usually in 24-48 hours)
- You accept or reject the offer online
- If you accept, they schedule an inspection
- They might lower the offer based on what they find
- You close when ready (usually 7-14 days)
The whole process happens mostly online. You might never meet anyone face to face until closing day.
Major iBuyer Companies
The biggest iBuyer companies today are Opendoor, Offerpad, Knock, and Homeward. Other big names like Zillow and Redfin tried iBuying but stopped because they lost too much money.
Opendoor is the largest iBuyer with 67% market share of the U.S. iBuyer segment. However, iBuyers accounted for less than 0.5 percent of all home purchases in 2023, which means they only buy a tiny part of homes sold in America.
Benefits of Working With iBuyers
iBuyers offer some advantages:
- Super fast offers: Get an offer in 1-2 days
- All online: Do everything from your phone or computer
- Clear timeline: Know exactly when you’ll close
- No showings: No strangers walking through your home
These companies work well for people who like doing things online and have homes in perfect condition.
Key Differences Between Cash Buyers and iBuyers
Understanding what makes these buyers different helps you pick the best option for your home.
Property Condition Requirements
Cash Buyers:
- Buy homes in any condition
- Purchase homes that need repairs
- Take properties with major problems
- Don’t require you to fix anything
iBuyers:
- Want homes in good or great shape
- Avoid fixer-uppers
- Prefer newer homes (built in the last 30 years)
- May ask you to make repairs before closing
If your house needs work, a cash buyer is probably your best bet.
Geographic Coverage
Cash Buyers:
- Work in your local area
- Understand neighborhood values
- Buy in rural and urban areas
- Available almost everywhere
iBuyers:
- Only work in certain big cities
- Focus on Sun Belt states (Arizona, Texas, Florida, etc.)
- Avoid small towns and rural areas
- Limited to specific markets
iBuyers are only active in specific geographic regions, generally targeting the biggest cities and surrounding areas but aren’t as active in more remote or rural locations.
Offer Prices
Cash Buyers:
- Make offers based on market value minus repair costs
- Typically pay 60-80% of after-repair value
- Consider your situation when making offers
- No hidden fees or deductions
iBuyers:
- iBuyers offered an average 86% of market value for homes in the first quarter of 2022
- Start with higher offers but add deductions later
- Charge 5-6% service fees
- Deduct repair costs from final price
The catch with iBuyers is that their first offer looks good, but after fees and deductions, you might get less money than you thought.
Fees and Costs
Cash Buyers:
- Usually charge no fees
- You pay normal closing costs
- What they offer is what you get
- No surprise deductions
iBuyers:
- Charge service fees of anywhere between 5% to 6% of the home sale price
- Take money off for repairs found during inspection
- Add costs for property taxes and utilities
- Final amount can be much less than first offer
Speed and Certainty
Cash Buyers:
- Close in 7-30 days (your choice)
- Very reliable (deals rarely fall through)
- Flexible with your timeline
- Will work with you if problems come up
iBuyers:
- Close around 7 to 14 days
- May back out after inspection
- Less flexible with timing
- Stick to their schedule, not yours
Personal Connection
Cash Buyers:
- Meet you in person
- Visit your property
- Answer questions directly
- Build relationships with sellers
iBuyers:
- Everything happens online
- Little human contact
- Automated process
- One-size-fits-all approach
Which Option Costs You More?
Let’s look at a real example to see which buyer gives you more money.
Example: $300,000 Home
With a Cash Buyer:
- Offer: $240,000 (80% of value)
- Fees: $0
- Repairs: $0 (they buy as-is)
- You receive: $240,000
With an iBuyer:
- Initial offer: $285,000 (95% of value)
- Service fee (5%): -$14,250
- Repair deductions: -$15,000
- Other fees: -$2,000
- You receive: $253,750
In this example, the iBuyer gives you more money. But remember, iBuyers only buy homes in great shape. If your home needs $30,000 in repairs instead of $15,000, your iBuyer offer drops to $238,750—less than the cash buyer.
When iBuyers Pay More
iBuyers might pay more if your home is:
- In perfect condition
- Located in a major city they serve
- Built within the last 30 years
- Similar to other homes in the area
- Worth less than $500,000
When Cash Buyers Pay More
Cash buyers often pay more if your home:
- Needs major repairs
- Has unique features
- Is in a small town or rural area
- Has title problems or liens
- Is in foreclosure or probate
Pros and Cons of Cash Buyers
Advantages
- Buy any home: Condition doesn’t matter
- Work anywhere: Available in all areas
- Local knowledge: Understand your market
- No fees: Keep more money in your pocket
- Flexible closing: Pick your timeline
- Handle problems: Work through title issues and liens
- Personal service: Talk to real people
- Reliable: Deals almost never fall through
Disadvantages
- Lower offers: Pay less than market value upfront
- Varies by company: Quality depends on who you choose
- Takes longer: Need a few days to inspect property
- Must meet in person: Can’t do everything online
Pros and Cons of iBuyers
Advantages
- Lightning fast: Get offers in 24-48 hours
- All digital: Do everything online
- Higher starting offers: Begin at 85-95% of value
- No showings: Skip the hassle of strangers visiting
- Clear process: Know what to expect
- Quick closing: Done in 1-2 weeks
Disadvantages
- High fees: Typical iBuyer fees range between 5% and 8%
- Limited areas: Only work in select cities
- Picky about homes: Won’t buy fixer-uppers
- Offer can drop: Price changes after inspection
- Less flexible: Must follow their timeline
- No personal touch: Everything is automated
- May back out: Can cancel after inspection
Which Option Is Right for You?
Choosing between a cash buyer and an iBuyer depends on your home and situation.
Choose a Cash Buyer If:
- Your home needs repairs or updates
- You live in a rural area or small town
- You’re facing foreclosure or probate
- You want to avoid fees
- You prefer working with local people
- Your home has title issues or liens
- You need flexible closing terms
- You’re a tired landlord with a rental property
According to We Buy Colorado’s process, local cash buyers provide personalized service and fair offers based on real market knowledge.
Choose an iBuyer If:
- Your home is in perfect condition
- You live in a major city they serve
- You’re comfortable with online transactions
- You want the fastest possible offer
- Your home is similar to others nearby
- You don’t mind paying high fees
- You can wait for their timeline
- You prefer minimal human contact
Questions to Ask Yourself
Before deciding, think about:
- What shape is my home in? If it needs work, go with a cash buyer.
- Where do I live? iBuyers only work in certain cities.
- How fast do I need to sell? Both are quick, but cash buyers are more flexible.
- Do I care about fees? iBuyers charge 5-8% fees; cash buyers usually don’t.
- What’s most important to me? Maximum money, speed, or convenience?
Common Myths About Cash Buyers and iBuyers
Myth 1: All Cash Buyers Are Scammers
Truth: Most cash buyers are legitimate business owners who want to help you sell fast. Check reviews and ask for references to find good ones. Companies like We Buy Colorado have strong local reputations and happy customers.
Myth 2: iBuyers Always Pay More
Truth: While initial offers are typically close to market value, iBuyer customers tend to make less than they would on the open market after fees and deductions.
Myth 3: You Have to Accept the First Offer
Truth: You can get offers from multiple cash buyers and iBuyers. Compare them to find the best deal for your situation.
Myth 4: Cash Sales Take Forever
Truth: Both cash buyers and iBuyers close quickly. Most deals finish in 7-30 days—much faster than traditional sales that take 60-90 days.
Myth 5: Only Desperate People Use These Services
Truth: All kinds of homeowners use cash buyers and iBuyers. Some just want convenience. Others are relocating for work or downsizing.
Red Flags to Watch For
Whether you choose a cash buyer or iBuyer, watch out for warning signs:
Cash Buyer Red Flags
- Asking for money upfront
- Refusing to provide references
- Pressuring you to sign quickly
- Not having a local address or phone number
- Won’t put offer in writing
- Unclear about their buying process
iBuyer Red Flags
- Offer seems too good to be true
- Won’t explain their fees clearly
- Changes terms after you agree
- Adds surprise costs at closing
- Can’t verify they’re a real company
- No clear contact information
How to Get the Best Deal
Follow these tips to maximize your money:
Get Multiple Offers
Don’t settle for one offer. Contact 3-5 buyers to compare. This helps you:
- See what your home is really worth
- Find the best terms
- Have leverage to negotiate
- Spot lowball offers
Understand All Costs
Ask each buyer to explain:
- Their offer price
- All fees and charges
- Repair deductions
- Closing costs you’ll pay
- Net amount you’ll receive
Check Their Reputation
Before accepting an offer:
- Read online reviews
- Ask for references
- Check with the Better Business Bureau
- Look for complaints
- Verify they’re licensed (if required in your state)
Know Your Home’s Value
Get a rough idea of your home’s worth before talking to buyers. Check:
- Recent sales of similar homes nearby
- Online home value calculators
- Local real estate listings
- County tax assessments
This knowledge helps you spot unfair offers.
Don’t Rush Unless Necessary
While both options are fast, take time to:
- Read all contracts carefully
- Ask questions about anything unclear
- Compare multiple offers
- Sleep on big decisions
If someone pressures you to decide immediately, that’s a red flag.
Tax Implications
Selling to a cash buyer or iBuyer has the same tax rules as any home sale.
Capital Gains Tax
If you’ve lived in your home for 2 of the last 5 years, you can exclude:
- $250,000 of profit (single filers)
- $500,000 of profit (married filing jointly)
If your profit is more than these amounts, you’ll pay capital gains tax on the extra amount.
Consult a Tax Professional
Tax rules can get complicated, especially if:
- You inherited the property
- You’re selling a rental or investment property
- You’re facing foreclosure
- You’ve done major improvements
Talk to a tax advisor or accountant before selling to understand your situation.
Alternative Options to Consider
Cash buyers and iBuyers aren’t your only choices.
Traditional Sale With an Agent
Best for: Homes in great condition where you have time to wait
Pros:
- Usually get highest price
- Agent handles marketing
- Professional guidance
Cons:
- Takes 60-90 days (or longer)
- Must prepare home for showings
- Pay 5-6% commission
- Deal may fall through
For Sale by Owner (FSBO)
Best for: People with real estate experience and time
Pros:
- Save on agent commission
- Full control over process
- Set your own price
Cons:
- Must handle all marketing
- Deal with buyers directly
- More work and stress
- May sell for less without exposure
Short Sale (If Underwater)
Best for: People who owe more than their home is worth
Pros:
- Avoid foreclosure
- Settle debt
- Protect credit somewhat
Cons:
- Bank must approve
- Takes many months
- Still affects credit
- Very complicated process
Cash Buyer vs. Traditional Sale
According to recent real estate market data, cash offers typically close faster due to fewer contingencies and have fewer complications because there is no underwriting.
Real Stories From Colorado Homeowners
Sarah’s Story: Inherited Home
Sarah inherited her grandmother’s house in Colorado Springs but lived in Texas. The house needed new plumbing and a roof.
“iBuyers wouldn’t even look at it because of the repairs,” Sarah says. “A local cash buyer gave me a fair offer and closed in two weeks. I never had to fly back to Colorado.”
Read more about selling inherited properties
Mike’s Story: Quick Relocation
Mike got a job offer in California and had to move in 30 days. His Denver home was in great shape.
“I got offers from both an iBuyer and a cash buyer,” Mike explains. “After fees, the iBuyer offer was only $8,000 more. But the cash buyer was more flexible on timing, so I went with them.”
Learn about selling when relocating
Jennifer’s Story: Avoiding Foreclosure
Jennifer fell behind on payments after a divorce. She needed to sell fast.
“The iBuyer wouldn’t work with me because of the foreclosure,” Jennifer says. “A local cash buyer understood my situation and closed in 10 days. They saved my credit.”
Discover foreclosure solutions
Questions to Ask Any Buyer
Before accepting an offer, ask these questions:
- What’s your final offer? Make sure you understand the net amount after all fees.
- What fees will I pay? Get a complete list in writing.
- How did you calculate this offer? Understand their pricing method.
- When can we close? Make sure the timeline works for you.
- What happens if you find problems? Know if the offer can change.
- Are there any contingencies? Find out what could cancel the deal.
- Can I see proof of funds? Verify they have money to buy.
- What’s your cancellation rate? Learn how often deals fall through.
- Who pays closing costs? Clarify who covers what expenses.
- Can I get everything in writing? Never accept verbal promises.
The Colorado Market Factor
Colorado’s housing market affects both cash buyers and iBuyers.
What Makes Colorado Special
Colorado has:
- Strong job growth attracting new residents
- Limited housing inventory
- Mountain properties with unique challenges
- Mix of urban and rural areas
- Varying climate affecting home conditions
Local Cash Buyers’ Advantage
Local cash buyers understand:
- Colorado’s specific building codes
- Mountain property challenges
- Seasonal market changes
- Neighborhood value differences
- Local buyer preferences
This knowledge helps them make better offers on Colorado homes.
iBuyer Limitations in Colorado
iBuyers mainly work in:
- Denver metro area
- Colorado Springs
- Boulder area
They avoid:
- Mountain homes
- Rural properties
- Small mountain towns
- Areas with extreme weather challenges
- Properties on well and septic
If your Colorado home is outside major cities, a cash buyer is probably your only fast-sale option.
How Market Conditions Affect Your Choice
The real estate market changes, affecting both types of buyers.
Hot Market (More Buyers Than Homes)
In a hot market:
- Traditional sales might get you more money
- iBuyers and cash buyers pay less compared to market sales
- Multiple offers are common
- Homes sell quickly anyway
Best choice: Consider listing with an agent if your home is in good shape.
Cool Market (More Homes Than Buyers)
In a cool market:
- Homes sit longer with agents
- Cash buyers and iBuyers offer certainty
- Fewer traditional buyers compete
- Speed becomes more valuable
Best choice: Cash buyers or iBuyers make more sense.
Current Market Trends
Interest rates, economy, and local factors all affect your options. Check current Colorado real estate trends before deciding.
The Future of Home Buying
Both cash buying and iBuying are changing.
What’s Changing
- More companies entering the market
- Better technology for valuations
- New hybrid models combining both approaches
- Increased regulation and consumer protection
- More transparency in offers and fees
What’s Staying the Same
- People will always need to sell homes quickly
- Condition will always matter for pricing
- Local market knowledge stays valuable
- Personal relationships build trust
- Fair pricing attracts sellers
Final Thoughts
Cash buyers and iBuyers both offer fast sales, but they serve different needs.
Choose a cash buyer if: Your home needs work, you want no fees, you live in a rural area, or you need flexible terms. Cash buyers work with you through tough situations like foreclosure, divorce, or probate.
Choose an iBuyer if: Your home is perfect, you live in a major city, you love technology, and you don’t mind paying 5-8% in fees.
For most Colorado homeowners facing challenges or owning homes that need work, a local cash buyer is the better choice. You’ll get personal service, fair offers, and flexible terms without the high fees.
Ready to sell your Colorado home fast? Contact We Buy Colorado today for a fair cash offer with no fees and no hassle. We buy houses in any condition and close on your timeline.
Or fill out our simple form to get started. We’ll give you an honest offer within 24 hours and work with you every step of the way.
Get your cash offer now – no obligations, no pressure, just a straightforward solution to sell your home fast.