Cash buyer vs realtor vs iBuyer: what each one really costs
Short answer
Listing with a real estate agent usually reaches the most buyers and can bring the highest price, but commission, repairs, concessions and months of carrying costs come out of that price. A cash buyer or iBuyer usually offers less up front in exchange for speed and fewer costs, so the right choice is whichever leaves you more money, on a timeline you can live with, once every cost line is counted.
- Compare net proceeds, not offer prices: price minus commission, repairs, concessions, holding costs, closing costs, transfer tax and the loan payoff.
- Transfer tax rules depend on the state, not on the type of buyer. New Jersey puts its fee on the seller; Delaware splits its tax equally; Pennsylvania and Florida leave the split to the contract (our transfer tax guide).
- When the buyer uses a mortgage, the lender must give the buyer a Closing Disclosure three business days before closing (CFPB). That form has seller-paid columns, including real estate commissions (12 CFR 1026.38).
- Your loan payoff is the same whoever buys. Servicers generally must send a written payoff statement within 7 business days of a written request (12 CFR 1026.36(c)(3)).
- This guide uses no industry averages. The example below is hypothetical, so plug in your own numbers.
What does it cost to sell a house?
Every home sale has the same handful of cost lines. What changes from one way of selling to another is which lines you pay, and how much.
- Commission. What you pay the brokerage, as set in the listing agreement you sign. Read that agreement, including any amount it says you will offer toward the buyer's agent, before you sign it.
- Repairs and preparation. Work to get the house ready to list, plus anything a buyer asks for after an inspection.
- Concessions. Seller credits toward the buyer's closing costs, or price cuts after an inspection or a low appraisal. The CFPB tells buyers to check that the seller credit on their Closing Disclosure matches what they agreed (CFPB).
- Holding costs. Mortgage interest, property taxes, insurance, utilities, HOA dues and upkeep for every month the house is still yours.
- Closing costs and transfer tax. Title and settlement fees, plus state and local transfer tax. Who pays the tax depends on the state (transfer tax guide).
- Payoff. Your mortgage balance and any other liens, paid at closing. This line is the same no matter who buys.
How do a realtor, a cash buyer and an iBuyer handle each cost?
| Cost line | List with an agent | Local cash buyer | iBuyer |
|---|---|---|---|
| Commission | Yes, as set in your listing agreement | Usually none when you sell directly | A service fee instead; check the offer for the amount |
| Repairs | Your cost before listing and after inspection | Usually none; the price reflects the condition | Check the offer for repair or condition adjustments after the company's assessment |
| Concessions | Common subject of negotiation | Should be none; get it in writing | Check the offer terms |
| Holding costs | Every month until closing | Shorter if the closing date is soon | Shorter if the closing date is soon |
| Closing costs | Usually split by contract and local custom | Often paid by the buyer; get it in writing | Check the offer terms |
| Transfer tax | Same state rules for every buyer; the contract can shift the split only where state law allows (guide) | ||
| Payoff | Same for every buyer; paid from the sale at closing | ||
| Price risk | Buyer financing, appraisal and inspection can change the deal | Lower price; no financing contingency if it is truly cash | Instant offer can change after the assessment |
iBuyers are companies that make quick online offers on homes and resell them. Their fees and eligibility rules are set by each company and published on its own website, so read the actual offer for your house.
How is a cash offer calculated?
Many investor offers are built from a formula like this one. Knowing it lets you check whether an offer makes sense:
Cash offer = after-repair value − repair costs − holding and closing costs − the buyer's margin
- After-repair value (ARV) is what the house would likely sell for once fixed up, based on recent nearby sales.
- Repair costs are the buyer's estimate to bring it to that condition.
- Holding and closing costs are what the buyer pays to own the house while working on it, then to resell it.
- Margin is the buyer's profit and risk cushion.
Ask any cash buyer to walk you through their ARV and repair estimate. A buyer who can't or won't explain the numbers is a reason to slow down.
A hypothetical example, with the math shown
Every number below is made up to show the arithmetic. It is not a typical commission, discount or margin, and it is not an estimate for your house.
Say a house needs a new roof and kitchen. A buyer estimates it would sell for $340,000 after repairs. Their offer works out like this: $340,000 ARV − $45,000 repairs − $20,000 holding and closing costs − $20,000 margin = $255,000.
Now compare that with listing the same house as-is, using assumed costs:
| Hypothetical line | List with an agent | Cash offer |
|---|---|---|
| Sale price | $300,000 | $255,000 |
| Commission (assumed total under the listing agreement) | −$15,000 | $0 |
| Repairs after inspection | −$12,000 | $0 |
| Seller credit to buyer | −$5,000 | $0 |
| Holding costs ($2,000 a month) | −$8,000 (4 months) | −$2,000 (1 month) |
| Other seller closing costs | −$3,000 | $0 (buyer pays) |
| Net before payoff and transfer tax | $257,000 | $253,000 |
In this made-up case, listing nets $4,000 more, but takes about three months longer and depends on the buyer's loan closing. Change one assumption and the answer flips. If the listing sold for $310,000, it would net $267,000, well ahead. If repairs after inspection came to $20,000 instead, listing would net $249,000, behind the cash offer. That is why you should run your own numbers.
When does listing with an agent make more sense?
Be honest with yourself here. Listing is often the better choice when:
- the house is in good shape and needs little more than cleaning and paint;
- you have months to wait and can keep paying the mortgage, taxes and insurance;
- you can handle showings, inspections and some back-and-forth on price;
- there is no foreclosure date, court deadline or other clock running.
In those cases the extra price an open-market sale can bring often outweighs the commission and holding costs. A cash offer can still be a useful floor to compare against.
When does a cash sale make sense?
- The house needs major repairs that you can't fund or don't want to manage.
- You inherited the house, live far away, or it is full of belongings.
- There is a deadline, such as a sheriff sale. See our foreclosure guides for Pennsylvania, New Jersey and Delaware.
- Tenants, code violations or title issues can make it harder to sell to buyers who need a mortgage.
- Certainty matters more than the last dollar: a firm date, no financing contingency and no repair requests.
How do you compare two offers line by line?
- Ask each buyer or agent for a net sheet that lists every cost line above, including who pays closing costs and transfer tax.
- Check the contingencies. Financing, appraisal and inspection contingencies give a buyer ways to renegotiate or walk away.
- Check the closing date and multiply your monthly holding costs by the months until then.
- Ask for proof of funds from any cash buyer, and the size of the earnest money deposit.
- Get your payoff statement so you know the real bottom line.
- Close through a licensed title company. When the buyer uses a lender, the Closing Disclosure shows seller-paid costs. In any sale, ask the settlement agent for the final settlement statement and check each line against your contract.
We buy houses for cash in Pennsylvania, New Jersey, Delaware and Florida, including Philadelphia and Orlando. Ask us for a written offer and put it next to your other options. You are under no obligation to accept it.
Frequently asked questions
Is a cash buyer always cheaper than a realtor?
No. A cash offer is usually lower than an open-market price, so it only nets more when the commission, repairs, concessions and holding costs you avoid add up to more than the price difference. Run both sets of numbers.
What is the difference between an iBuyer and a local cash buyer?
An iBuyer is a company that makes quick online offers and resells homes, usually charging a service fee and checking the condition before closing. A local cash buyer usually buys as-is. Fees and terms vary by company, so read each written offer.
How is a cash offer on a house calculated?
Many start from the after-repair value, then subtract estimated repairs, holding and closing costs, and the buyer's margin. Ask the buyer to show you each number.
Who pays transfer tax when I sell to a cash buyer?
The same state rules apply whoever buys. New Jersey puts its fee on the seller, Delaware splits its tax equally, and Pennsylvania and Florida let the contract decide.
Can I negotiate a real estate commission?
The commission is whatever you agree to in the listing agreement, so read it and ask about the amount and any compensation offered to a buyer's agent before you sign.
Do I still have to pay off my mortgage if I sell for cash?
Yes. The payoff comes out of the sale at closing, whoever buys. Request a written payoff statement early; servicers generally must send it within 7 business days.
Sources
- Consumer Financial Protection Bureau, Closing Disclosure explainer
- Consumer Financial Protection Bureau, Regulation Z § 1026.38 (Closing Disclosure content, including real estate commissions)
- Consumer Financial Protection Bureau, Regulation Z § 1026.36 (payoff statements)
- Eternal Home Buyers, Transfer tax when selling a house: PA vs NJ vs DE vs FL (with links to each state's official source)
This is general information, not legal or tax advice. Costs vary by house, market and contract. The example is hypothetical. Review any listing agreement or purchase contract with a real estate attorney before you sign.