What each one actually is
These are two different business models, even though both promise a fast sale without listing on the open market.
- A direct cash buyer is a company that buys your house with its own funds, fixes it up, and resells it. The price it offers already accounts for the work the home needs. There is no agent, no financing contingency, and no commission.
- An iBuyer (short for "instant buyer") is a tech company such as Opendoor or Offerpad that uses automated valuation models to make a quick offer, then buys the home, prepares it, and resells it. The model is built around homes that are already in good, predictable condition.
The core trade-off: an iBuyer usually pays a higher percentage of market value but adds fees and post-inspection deductions, while a direct cash buyer builds every cost into one as-is number with nothing deducted later.
Offer percentage: what you keep
iBuyers aim to pay close to fair market value, then earn their margin through fees and repair adjustments rather than a deep discount on the headline offer. Offerpad has publicly described paying roughly 70% to 80% of a home's fair market value, depending on condition and market. Opendoor calculates each offer individually using comparable sales and a condition adjustment.
Direct cash buyers typically pay a wider range below market value because they take on homes that need real work and carry more resale risk. The right way to compare is not the sticker percentage but your net proceeds — the dollars that actually reach you after every fee and deduction. A higher iBuyer offer can shrink fast once the service fee and repair credits come out.
Fees: the biggest difference
This is where the two models split most clearly.
- Opendoor charges a service fee that, as of 2026, varies by transaction and is shown inside your personalized offer breakdown rather than published as a fixed number. Historically it sat around 5% of the sale price. Sellers also pay typical closing costs, and a condition adjustment is deducted for anticipated repairs.
- Offerpad discloses a service fee that can run higher — reported around 6% to as much as 8% on a cash offer — plus closing costs and repair-related deductions.
- A direct cash buyer like Sterling Home Offer charges the seller no commissions and no fees, and covers standard closing costs. The number you accept is the number you build your plans around.
With an iBuyer, the offer you first see and the amount you finally net can differ meaningfully once fees and inspection findings are applied. Always read the full breakdown.
Condition requirements: who qualifies
iBuyers are selective about which homes they will buy, because their model depends on a quick, low-risk resale.
- Opendoor generally buys owner-occupied homes built after about 1930, with a lot size capped near 1.5 to 2 acres. It typically excludes mobile or prefabricated homes, homes with tenants, and properties in flood zones.
- Offerpad buys single-family homes, condos, and townhomes, generally built after 1960, with a lot size up to about 1 acre and a value cap near $1 million. It excludes manufactured or mobile homes, properties with tenants, and homes with significant title or structural problems.
- A direct cash buyer buys houses as-is, in any condition — including older homes, properties needing major repairs, fire or water damage, and difficult title situations. No repairs, cleaning, or staging are required.
If your home is older, damaged, occupied, or otherwise outside an iBuyer's box, a direct cash buyer is often the only fast path.
Speed: how fast you close
Both models move faster than a traditional listing, which often takes 30 to 60 days for a financed buyer to close. Cash sales generally close in about 7 to 30 days.
- iBuyers let you pick a flexible closing date, often in a range of roughly 8 to 90 days, but the process includes an inspection or virtual assessment that can change your final number before you close.
- A direct cash buyer can move quickly — Sterling can close in as little as ~14 days, with 14 to 30 days typical — and can also slow down to wait through probate or your moving timeline. Because there is no financing and no post-inspection renegotiation, the offer is more stable.
Side-by-side comparison
| Factor | Direct cash buyer | iBuyer (Opendoor / Offerpad) |
|---|---|---|
| Typical offer | Below market, all costs built in (Sterling ~65-80% of after-repair value by condition) | Closer to market value (Offerpad ~70-80% FMV); fees/deductions reduce net |
| Seller fees | None | Service fee (Opendoor ~5%; Offerpad up to ~8%) plus closing costs |
| Repair deductions | None after offer | Condition adjustment deducted after inspection |
| Condition accepted | Any condition, as-is | Standard condition; age/lot/value limits apply |
| Eligible homes | Most homes, including distressed, occupied, problem title | Newer single-family, condos, townhomes; many exclusions |
| Speed | ~14-30 days; can wait if needed | ~8-90 days, with inspection step |
Nothing is binding with a reputable cash buyer until you sign a written purchase agreement, so you can compare offers without obligation.
Who each option suits
An iBuyer may fit you if your home is relatively new, in good condition, in a metro the iBuyer serves, and within its price and lot limits — and you are comfortable trading a service fee for a near-market headline offer and a self-scheduled closing.
A direct cash buyer may fit you if your home needs repairs, is older or damaged, is inherited or in probate, is vacant, has tenants, sits in a flood zone, or you are behind on payments or facing a deadline. It also fits when you simply want one clean, fee-free number with no post-inspection surprises.
The best move is to get both kinds of offers and compare net proceeds, not headline price.