What Is an iBuyer, and Should You Sell to One?

What is an iBuyer?

An iBuyer, short for instant buyer, is a company that uses a computer pricing model to make a fast cash offer on a house. If you accept, it inspects the house, cuts the offer for repairs, closes on a date you choose and then resells the house, usually after light fixes. It makes money from a service fee and from the resale.

The model looks at recent sales near you, your home's size and age and the market's direction. A person may review it. The first number is a preliminary offer. The real number comes after someone walks through the house.

iBuyers are one of four kinds of companies that buy houses for cash. The others are local flippers, buy-and-hold landlords and wholesalers, who sign your contract and then hand it to an investor. If you're not sure which one you're talking to, our page on what a wholesaler does with your contract, and who pays them explains that one.

How does selling to an iBuyer work, step by step?

You request an offer online, get a preliminary number, schedule an inspection, get a final offer with repairs taken out, sign and pick a closing date. One large buyer's own page says you choose a close date 21 to 60 days out. The final offer is the one that matters.

1. You enter your address and answer questions about condition, updates and occupancy.
2. You get a preliminary offer, often within a day or two.
3. Someone inspects the house, in person or by video.
4. You get a final offer with a repair amount subtracted.
5. You sign the purchase agreement and choose a closing date.
6. You move out and close. The iBuyer pays off your mortgage from the sale and wires you the rest.

The gap between step 2 and step 4 is where most of the surprise lives.

How much does an iBuyer pay, and what do you actually take home?

Less than the headline offer. Take the offer, subtract the service fee, your share of closing costs and the repair cut after inspection. On the house we worked out below, a $380,000 offer became about $345,500 in the seller's pocket before the mortgage payoff, about $11,400 less than a typical Realtor sale.

Nobody publishes one fixed fee. One large iBuyer says its service charge varies by market and property, and its own 2026 examples use 5 percent. A 2020 page on the same site put the average at 5 to 8 percent, never higher than 14. So here is one house, worked out three ways.

• The house:a three-bedroom in the Phoenix area, worth about $400,000 on the open market. It needs about $8,000 of small fixes a buyer's inspector would flag. The owner has $200,000 left on the mortgage. Arizona has no transfer tax.
• What holding it costs each month:about $1,700. That's $1,083 of mortgage interest ($200,000 at 6.5 percent, divided by 12), $200 of property tax, $150 of insurance and about $270 for utilities and upkeep.

Where the cash number comes from: the cash buyer starts from what the house sells for fixed up, about $410,000. Then it subtracts $8,000 of repairs, $28,700 to resell it (agents and closing on the way out), $12,000 of project costs (escrow and title on the way in, insurance, taxes, utilities and financing for about three months) and a $30,000 margin. That's the same four-line formula we publish on how we calculate a cash offer, with every input shown. And the faster you need to close, the less any cash buyer pays, us included.

Three numbers in the iBuyer column are guesses, and we've been generous with all of them. A 95 percent offer is the high end. A 5 percent fee is the low end of the company's own old range. The $10,000 repair cut assumes they price your $8,000 of fixes a little higher than you'd pay, which is what the FTC found one large buyer did (more on that below).

What this table says plainly: for this house, the Realtor nets the most, the iBuyer is in the middle and a local cash buyer like us pays the least. If your house looks like this one and you have three or four months, list it.

How does the repair cut after inspection work, and can you push back?

After the inspection, the iBuyer subtracts what it says repairs will cost. It does the work after closing, at its own prices. One large buyer's own page says you may disagree with the scope or the cost. Ask for an itemized list, get your own contractor quote and push back on any line that's padded.

This is where an offer can slide. In 2022 the FTC said one of the largest iBuyers “asked sellers to pay for home repair costs that were higher than what people would typically spend.” The same case said its offers were lower than a home's market value and that most sellers “typically lost thousands of dollars” compared with selling on the open market. The company agreed to pay $62 million, and in April 2024 the FTC sent refunds to 54,689 homeowners.

What to do:

• Ask for the repair list line by line, with a dollar amount on each line.
• Get one contractor quote for the biggest two or three lines.
• Show a competing offer if you have one. Repair cuts can drop when you do.
• Decide your walk-away number before the final offer arrives, not after.

Can you back out after the final offer?

Before you sign, yes, and you owe nothing. After you sign, it depends on the purchase agreement. One large buyer's own page says the offer is binding once you sign, and the same page also says you're free to walk away before closing. Read the cancellation section of the contract before you sign.

When the company's own page says two things, the contract is the only answer. Look for three things in it: whether you can cancel after signing, whether it costs you anything to cancel and whether the buyer can cancel or cut the price late. Some sellers report the buyer side changing terms close to closing, so get those rules in writing too.

If you're in Arizona or Texas and you're not sure what a clause means, a real estate attorney can read it for a flat fee. That's cheap next to a $400,000 decision.

Which houses do iBuyers turn down?

Anything that doesn't fit an ordinary resale. One large buyer's own list rules out mobile and manufactured homes, buildings with five or more units, vacant land, large acreage, major foundation or structural damage, fire damage, severe water damage or mold throughout. Many pre-1930 homes don't qualify, and tenants have to be out by closing.

From the same help pages:

• Some condos are out, depending on the HOA and the market.
• Leased or financed solar panels usually have to be paid off before closing.
• The company mostly buys houses where the owner lives.

The list isn't random. An iBuyer makes money by buying fast and reselling fast, with light repairs. Anything that needs a big repair, a long project or a tenant gone breaks that math. Those are the houses local cash buyers are built for.

Do iBuyers buy in California, Arizona and Texas?

Arizona and Texas, yes, and heavily. One large iBuyer names the Phoenix area and Dallas-Fort Worth, Houston, San Antonio and Austin as markets. California isn't named on its market list, though it says it buys single-family homes across the lower 48. In California, expect fewer iBuyer offers and more local cash buyers.

Coverage changes. Check whether a company actually closes deals in your city, not just whether it accepts your address.

Are iBuyers still around in 2026?

Yes, and smaller than they were. One of the biggest home-search sites shut its iBuying business in late 2021, laying off about 2,000 people. A large brokerage closed its iBuyer arm in November 2022. In September 2026, NAR's monthly survey found 2 percent of sellers sold to an iBuyer.

Both companies that quit pointed at the same problem: pricing a house you'll resell months later is hard, and harder when rates rise. That's useful to know, because the risk of guessing wrong on price doesn't disappear. It gets built into your offer and your fee.

iBuyer, Realtor or local cash buyer: which fits your house?

Match the buyer to the house. A newer, clean house in a big Phoenix or Texas metro fits an iBuyer if speed matters more than about $11,000. A house you have time to fix and list fits a Realtor. A house with big repairs, tenants, an estate or a deadline fits a local cash buyer.

If you list, use a Realtor, a licensed agent bound by the National Association of Realtors' Code of Ethics, and have a real estate attorney read the contract. Here's why we recommend a Realtor over any licensed agent. We never recommend selling by owner, because most by-owner sellers give back more in price than they save.

How do you get the most from an iBuyer offer?

Get two or three offers, from at least one iBuyer and one local buyer, plus a Realtor's estimate of what you'd net by listing. Compare what you take home, not the headline price. Ask for the itemized repair list and the service fee in dollars before you sign.

A short checklist:

1. Get the service fee as a dollar amount, not a percent.
2. Get the repair list line by line.
3. Get a Realtor's written estimate of your net from listing.
4. Put all three in one table, like the one above.
5. Pick a closing date that leaves you time to move without paying for two places.

Our cost of selling a house, worked out line by line shows how to fill in the Realtor column for your own house.

When is an iBuyer the wrong call?

When you have time. If your house is in decent shape and you can wait three or four months, listing with a Realtor usually nets more, often a lot more. An iBuyer is also the wrong call when your house has big repairs, tenants or an unusual lot, because it will probably say no or cut deep.

It can also be wrong when the speed isn't real. If you're picking a closing date 60 days out anyway, you're paying the fee for convenience, not speed. Weigh that honestly. Sometimes convenience is worth $11,000 to you. Sometimes it isn't.

Where does SunnyNest Homes fit?

We buy the houses iBuyers turn down: big repairs, older homes, tenants, inherited houses and sellers on a deadline. We show our math in writing. If listing or an iBuyer would net you more, we'll tell you, because most sellers we hear from shouldn't sell to us.

When we buy, we work two paths at once. We look for a loan to buy the house ourselves, and we ask the investors on our list whether they want it. We close with whichever comes through first, because the cash any one investor has on hand changes week to week. If an investor closes, we tell you before you sign. They pay our fee, in dollars, and it never comes out of your price.

For the full side-by-side of a cash sale against a listing, see how a cash sale stacks up against a listing, side by side.

Questions sellers ask us