Menu
303-565-1548

What’s the Difference Between Cash Buyers and iBuyers

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:

  1. You contact them about your house
  2. They look at your property in person
  3. They give you a cash offer based on what they see
  4. You pick when to close (usually 7 to 30 days)
  5. 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:

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:

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:

  1. You fill out an online form with your home details
  2. Their computer program creates an offer (usually in 24-48 hours)
  3. You accept or reject the offer online
  4. If you accept, they schedule an inspection
  5. They might lower the offer based on what they find
  6. 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:

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:

iBuyers:

If your house needs work, a cash buyer is probably your best bet.

Geographic Coverage

Cash Buyers:

iBuyers:

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:

iBuyers:

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:

iBuyers:

Speed and Certainty

Cash Buyers:

iBuyers:

Personal Connection

Cash Buyers:

iBuyers:

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:

With an iBuyer:

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:

When Cash Buyers Pay More

Cash buyers often pay more if your home:

Pros and Cons of Cash Buyers

Advantages

Disadvantages

Pros and Cons of iBuyers

Advantages

Disadvantages

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:

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:

Questions to Ask Yourself

Before deciding, think about:

  1. What shape is my home in? If it needs work, go with a cash buyer.
  2. Where do I live? iBuyers only work in certain cities.
  3. How fast do I need to sell? Both are quick, but cash buyers are more flexible.
  4. Do I care about fees? iBuyers charge 5-8% fees; cash buyers usually don’t.
  5. 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

iBuyer Red Flags

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:

Understand All Costs

Ask each buyer to explain:

Check Their Reputation

Before accepting an offer:

Know Your Home’s Value

Get a rough idea of your home’s worth before talking to buyers. Check:

This knowledge helps you spot unfair offers.

Don’t Rush Unless Necessary

While both options are fast, take time to:

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:

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:

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:

Cons:

For Sale by Owner (FSBO)

Best for: People with real estate experience and time

Pros:

Cons:

Short Sale (If Underwater)

Best for: People who owe more than their home is worth

Pros:

Cons:

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:

  1. What’s your final offer? Make sure you understand the net amount after all fees.
  2. What fees will I pay? Get a complete list in writing.
  3. How did you calculate this offer? Understand their pricing method.
  4. When can we close? Make sure the timeline works for you.
  5. What happens if you find problems? Know if the offer can change.
  6. Are there any contingencies? Find out what could cancel the deal.
  7. Can I see proof of funds? Verify they have money to buy.
  8. What’s your cancellation rate? Learn how often deals fall through.
  9. Who pays closing costs? Clarify who covers what expenses.
  10. 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:

Local Cash Buyers’ Advantage

Local cash buyers understand:

This knowledge helps them make better offers on Colorado homes.

iBuyer Limitations in Colorado

iBuyers mainly work in:

They avoid:

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:

Best choice: Consider listing with an agent if your home is in good shape.

Cool Market (More Homes Than Buyers)

In a cool market:

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

What’s Staying the Same

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.

We Buy Colorado

Top Pages

Top Cities

  • Aurora
  • Arvada
  • Denver
  • Lakewood
  • Greeley
  • Boulder

© 2025 WeBuyColorado, All Rights Reserved.

Subscribe to our Newsletter