Cash buyer vs wholesaler vs flipper vs iBuyer — who's actually buying your house

Why "cash buyer" doesn't mean one thing

I've watched this play out hundreds of times. A homeowner gets a postcard, calls the number, and a guy named Brad shows up two days later in a polo shirt and says, "I'd like to make you a cash offer today." Brad and his three competitors who also got the postcard list could be four entirely different businesses. The price they're willing to pay is different. The contract they're going to hand you is different. The probability that the deal actually closes is different. The amount of leverage you have to negotiate is different.

The four players are: the principal cash buyer (buy-and-hold), the flipper, the wholesaler, and the iBuyer. They all use the phrase "cash offer." They are not the same. The differences show up in the contract you sign, the closing date you get, and the wire amount that hits your account.

1. The principal cash buyer (buy-and-hold)

This is the investor who buys the house with their own money (or fund money), holds it as a rental, and collects monthly cash flow plus long-term appreciation. They don't need to flip it. They aren't planning to renovate and resell. They want a property whose rent covers the mortgage, taxes, and maintenance, with enough left over to make the deal worth owning.

How they make money

Spread between rent and carrying cost. A typical buy-and-hold underwrites for a 1% rule (monthly rent ≥ 1% of purchase price) or some variation depending on market. They make money over 5–30 years through cash flow, mortgage paydown by tenant, tax depreciation, and price appreciation.

How they price

Closer to retail than a flipper. A buy-and-hold has patient capital — they aren't trying to clear $40,000 of profit on a 6-month flip. So they can pay 80–90% of retail for a show-ready house in a rentable neighborhood. The constraint is whether the rent covers the carrying cost at that purchase price. ATTOM Data's institutional investor reports consistently show buy-and-hold purchase prices running closer to market value than flipper purchase prices in the same metro.

What they want from you

• A house that doesn't need a full renovation. Cosmetic updates fine; gut rehab not their lane.
• A neighborhood that rents reliably. School district, crime rate, vacancy rate matter.
• A normal closing timeline. They aren't in a hurry; 21–30 days is fine.
• Clean title and a normal contract. They have lawyers; they don't need to gimmick the contract.

Contract red flags

Generally fewer than the other three. Watch for: assignment clauses (a real principal buyer doesn't need them), inspection periods longer than 7 days (they should have already underwritten), and earnest money smaller than 1% of price (real institutional money posts 1–3%).

2. The flipper

The flipper buys a house, renovates it over 3–6 months, and relists on the MLS at After-Repair Value (ARV). They're not looking to keep your house — they're looking to clear a specific dollar profit on a specific timeline. ATTOM Data's quarterly Home Flipping Report tracks this segment closely; average gross flip ROI has run 25–35% across recent reports, with the actual net (after rehab cost, carrying, and selling costs) usually landing in the 8–15% range.

How they make money

Spread between purchase price plus rehab cost and resale price. They're underwriting a specific number — usually $25,000 to $75,000 net profit per flip depending on price point — and walking away if your house won't deliver it.

How they price

The 70% rule. Maximum offer = 70% of ARV minus rehab cost. Some operators use 75% in expensive markets where the absolute dollar profit is larger; some use 65% in slower markets where they need a bigger margin for risk. The math is unforgiving. If your house has $300,000 ARV and needs $40,000 of rehab, the flipper's max offer is $170,000 — and they'll start the negotiation lower than that to leave room.

What they want from you

• A house with a realistic spread to ARV. Not move-in-ready (that's the buy-and-hold's lane). Needs work.
• Speed. They have a hard money loan running at 10–13% and they're paying interest from day one. 14-day close beats 30-day close.
• An "as-is" sale with no repair contingency on their side.
• A walkthrough window. They want to bring a contractor through before it's too late to walk.

Contract red flags

The flipper is the player who runs the negotiation tactics described in the article on how flippers really negotiate. Specifically watch for: long inspection periods (creating retrade leverage), earnest money paid to the buyer instead of escrow, vague or missing closing dates, and contracts written by the buyer's "in-house" attorney instead of through normal real-estate counsel.

3. The wholesaler

The wholesaler does not buy your house. The wholesaler signs a contract with you to buy your house, then sells that contract to an actual end buyer (a flipper or a buy-and-hold) for an assignment fee. The wholesaler makes the spread between what you sign for and what they assign for. They never own the property; they own the contract.

How they make money

Assignment fee — the spread between your contract price and the price they sell the contract for. Typical assignment fees run $5,000 to $30,000. In hot markets I've seen them run $50,000+. The wholesaler's job is to get a contract priced low enough that they can mark it up and still find an end buyer.

How they price

Below the flipper's number, because the flipper is their end customer and they need to leave room for the markup. If a flipper would pay $170,000 for your house, a wholesaler will try to lock you in at $150,000–$160,000 and assign the contract to the flipper at $170,000. Sometimes you'll see wholesaler offers as low as 50–60% of ARV minus repairs — that's pure shotgun pricing, hoping you'll accept under pressure and they can find anyone to take the assignment.

How to spot one

• "And/or assigns" on the buyer line of the contract. This is the tell. It means the contract is transferable. A real buyer doesn't need that language.
• Earnest money under $1,000. Wholesalers post tiny EMD because they're at risk if they can't find an end buyer.
• Long inspection / due-diligence windows (10–21 days). The wholesaler is shopping the contract during that window.
• Vague closing date. "Closing within 30 days" rather than a specific calendar date.
• Reluctance to name the actual end buyer or to put the buyer's entity name on the contract.

Is wholesaling legal?

In most US states, yes — but with limits. Wholesaling sits in a regulatory gray zone in many state real-estate license acts. States that have tightened up: Illinois (Public Act 101-0357 and subsequent rule), Oklahoma, South Carolina, Pennsylvania, Maryland, and a handful of others now require either a real-estate license or some form of disclosure to the seller that the contract may be assigned. Other states are silent. The boundary is usually whether you're marketing the property itself versus marketing the contract — the former is regulated brokerage activity, the latter is generally permitted as principal-side contract assignment. Treat any "and/or assigns" deal as a wholesaler deal and protect yourself accordingly.

4. The iBuyer

The institutional buyer running an algorithmic, online-first cash-offer business. The two operating at scale today are Opendoor and Offerpad; Zillow Offers exited the segment in 2021 after taking large losses, and Redfin Now wound down in 2022. The remaining iBuyers operate in a defined list of metros and decline most houses outside their box.

How they make money

Service fees plus modest spread. The Opendoor / Offerpad service fee runs 5–10% depending on market and program; the total cost to seller (service fee + repair credits + closing costs) typically runs 11–15% of resale price per the academic literature. Buchak, Matvos, Piskorski, and Seru's NBER Working Paper 28252 ("iBuyers: Liquidity in Real Estate Markets?") found that iBuyer net spread to seller ran meaningfully tighter than flipper spread but with a higher total transaction cost when service fees are included.

How they price

An algorithm runs comps and ARV on your house, applies condition adjustments, subtracts a service fee, subtracts expected repair credits (revealed after their inspection), and produces a number. Their underwriting model is closer to a buy-and-hold than to a flipper — they're not pricing for renovation, they're pricing for a quick resale at slight discount with their service fee baked in.

What they want from you

• A house in their pre-defined metro and product range.
• Build year typically 1930+, sometimes 1960+ depending on metro.
• No major foundation, fire, mold, or hoarding issues.
• HOA dues under their cap, lot size under their cap.
• A standard product — single family, 3+ bed, in a decent neighborhood.

Contract red flags

The iBuyer red flag is different from the others: it's the gap between the headline offer (which feels generous) and the post-inspection number (which doesn't). Their inspection window is the moment they retrade by claiming repair credits of $5,000 to $25,000 against the original number. The full math after fees and credits is rarely 250 — it's closer to the flipper number than the headline suggested.

The same house, four different offers

Here's a worked example. Take a 3-bedroom, 1,500 sqft house in a stable suburb with $300,000 ARV. The house is dated but functional — original 1985 kitchen, carpet over hardwood, roof at year 18, HVAC at year 12. Renovation scope: $40,000 for a kitchen + bath update, paint, flooring, and HVAC replacement. The same house gets these four offers:

• Buy-and-hold cash buyer: $210,000. They aren't doing a full reno. They'll spend $8,000 on paint and flooring, rent it as-is at $2,100/month, and let the tenant live with the 1985 kitchen for 5 years. The math works at $210k against $2,100 rent.
• Flipper: $170,000. 70% × $300,000 ARV = $210,000, minus $40,000 in rehab = $170,000 max offer. They might start the negotiation at $160,000 and let you push them to $170,000.
• Wholesaler: $150,000–$160,000. They need to assign the contract to the flipper at the flipper's $170,000 max, so they sign you up at $150,000 to leave $15,000–$20,000 of assignment fee for themselves.
• iBuyer headline offer: $250,000. Looks great. Then the inspection retrade comes back with $15,000 of repair credits, the service fee runs $20,000 (8%), and seller-paid closing costs run $5,000. Net to you: $210,000 — same neighborhood as the buy-and-hold offer, with more paperwork.

The spread between best offer and worst offer is $60,000 on this $300,000 house. The seller who picked up the first postcard and assumed all four offers would be in the same neighborhood is leaving $40,000–$60,000 on the table.

Which one you want, by situation

• Show-ready house in a good rental neighborhood: Buy-and-hold, every time. They'll pay closer to retail than the other three combined.
• House needs $20k–$80k of work: Flipper, with the lowest number but the most certain close. Or an iBuyer if it's their box. Avoid the wholesaler unless they disclose the end buyer up front.
• Major damage (fire, foundation, hoarding): Flipper or specialty rehab buyer. iBuyers will decline. Wholesalers may take it on but will struggle to find an end buyer for the assignment, which means a higher chance the deal collapses.
• Tight timeline (under 14 days): Direct cash buyer, not a wholesaler. A wholesaler can't promise a close they don't yet have the end buyer for.

What we do

When you ask Easy Cash Offer for a number, we route your property to the buyer profile in our network that underwrites your specific house most aggressively. For a show-ready rental-grade house, that's the buy-and-hold. For a flip-grade house, that's the flipper. For a major-damage house, that's a specialty rehab buyer. The number you see reflects which lane your house actually sits in, with the math shown so you can sanity-check it. The article on vetting a cash buyer walks the diligence checklist for whichever player ends up on the contract.