Local cash buyer vs. iBuyer (Opendoor, Offerpad): how to tell them apart.
"Cash buyer" sounds like one thing, but it's actually two completely different businesses standing on the same word. On one side: national companies running algorithms (Opendoor, Offerpad, and the various private-equity-backed buyers operating under different names). On the other side: local Tampa Bay operators using their own money. They look similar from the outside. Up close, they're built on opposite economics, and they will treat you differently as a seller because of it.
If you've been emailed an "instant offer" from one of the national platforms, that number is not directly comparable to a local cash buyer's offer. We'll show you why, what to actually compare, and which type fits which seller.
What an iBuyer actually is
iBuyer stands for "instant buyer." The model: a tech-driven national company uses an algorithm to estimate your home's value from public data, sends you a preliminary offer in minutes, then runs an inspection. After the inspection, they typically reduce the offer (sometimes by 5-15%) for "repairs identified," and charge a "service fee" of 5-7% on top. They close in 14-30 days, fix the home cosmetically (paint, carpet, sometimes appliances), and resell on the MLS.
The biggest iBuyers operating in Tampa Bay: Opendoor and Offerpad. Zillow tried this and exited in 2021 after losing $400 million. The model works, but only on a narrow slice of the market.
What a local cash buyer actually is
A local cash buyer is what most people picture when they hear "cash for houses": a person or small team in Tampa Bay using their own capital (or a private lender) to buy properties directly. They walk through the house personally, run rehab numbers based on local contractor pricing, and typically do bigger renovations than iBuyers (kitchens, bathrooms, roofs, HVAC, layout changes). No service fee. They make their money on the spread between purchase and resale, not on a percentage charged to you.
Local buyers buy in Hillsborough, Pinellas, Pasco, Manatee, and Sarasota. Some specialize in specific neighborhoods (Brandon, Riverview, Clearwater, St. Petersburg). The good ones have closed dozens to hundreds of deals locally and have public records to prove it.
The side-by-side
| Factor | iBuyer (Opendoor, Offerpad) | Local Cash Buyer |
|---|---|---|
| Who's buying | National corporation, algorithm-driven | Local person or small team |
| Service fee | 5-7% (sometimes higher with add-ons) | $0 |
| Initial offer | 88-92% of est. value, online instant | 70-85% of after-repair value, 24-hour |
| Net after fees and adjustments | ~80-85% of value (typical) | 70-85% of after-repair value, no further fees |
| Will buy older homes (pre-1960)? | No | Yes |
| Will buy homes over $750K? | Often no | Yes |
| Will buy homes needing major repairs? | No | Yes |
| Will buy homes with foundation issues? | No | Yes |
| Will buy with a tenant in place? | Rarely | Yes |
| Pre-foreclosure / probate | Generally no | Yes |
| Inspection period | 10-14 days, often re-trades the price | 5-7 days, price typically holds if disclosure was accurate |
| Closing speed | 14-30 days | 7-21 days |
| Walk-rate (deal falls apart after offer) | ~25-40% | ~3-5% |
The "instant offer" trap
The thing iBuyers do well is generate a number fast. The thing they do less well is honor it. After their algorithm sends you a preliminary offer, the inspection happens. The inspection report drives a "repair credit" request. Industry data suggests that roughly 60% of iBuyer offers in Tampa Bay are revised downward after the inspection, with the average reduction in the $5,000-$15,000 range. So the headline offer that looks great in your email isn't usually the offer you actually walk away with.
Local buyers aren't immune to this either, but the math is more transparent. Our offer comes from a walk-through where we already saw the issues. The price you sign for is the price you close at, barring something materially undisclosed. The lower walk-rate isn't a marketing claim. It's a function of the model: a person looked at the house and priced what they saw.
What an iBuyer won't buy (and a local buyer will)
iBuyer rejection criteria are public and consistent across the major platforms:
- Built before 1960 (some platforms cut off at 1930)
- Over $750,000 in value (varies by market)
- Manufactured or mobile homes
- Active homeowner's insurance claims
- Foundation issues
- Mold, fire, or water damage
- Septic failures
- Roof needing replacement
- Significant deferred maintenance ($30K+)
- Probate not yet closed
- Tenant in place (in most cases)
- Solar lease that doesn't transfer cleanly
- Properties on busy roads or near commercial use
- Properties in flood zones (varies)
- Non-standard layout (e.g., bedrooms with no closets)
Local Tampa Bay buyers buy almost all of the above. We've closed homes from 1924, homes with active leaks, homes with tenants in place, homes mid-probate, and homes that needed $80K of work. The lower the home matches "iBuyer-perfect," the bigger the gap in who can actually buy it.
Net dollars: the comparison most people skip
Sellers see the headline iBuyer number and assume it's bigger. Sometimes it is. Often it isn't, after the fees and the inspection trade. Here's a typical Brandon home worth $340,000 fixed up, comparing what each buyer net-pays the seller:
| Line item | iBuyer (Opendoor) | Local Cash Buyer |
|---|---|---|
| Headline offer | $306,000 (90% of value) | $240,000 (after walk-through) |
| Service fee (5%) | − $15,300 | $0 |
| Post-inspection reduction | − $11,000 (typical) | $0 |
| Closing costs | − $4,000 | $0 |
| Net to seller | $275,700 | $240,000 |
That gap of about $35K is real. It's also predicated on the iBuyer not rejecting the property. If the home is older, has any of the dozen-plus rejection triggers, or fails the inspection's tighter standards, the iBuyer offer goes away entirely and the local buyer's number is the only one on the table. For a move-in ready 2005 Brandon home, the iBuyer wins on net. For a 1965 Pasco ranch with a 22-year-old roof, the iBuyer doesn't compete.
Which one you should actually call
Three rules of thumb:
- If your house is post-1960, under $750K, in good condition, no special situation: get an iBuyer offer first. They'll often net the most.
- If your house is older, needs work, has any of the rejection triggers, or you have a special situation: skip the iBuyer and call a local buyer directly. The instant-offer process will waste two weeks before they pull out.
- If you're not sure: call both. Compare net dollars, not headline offers. The number that matters is the one on the wire.
For more on what a local cash sale actually looks like in Tampa Bay, see our realtor vs. investor comparison and the deeper what is a real estate investor piece. Or read the full complete Tampa Bay cash sale guide for the end-to-end process.
Frequently asked questions
What's the difference between an iBuyer and a local cash buyer?
iBuyers are national, algorithm-driven, charge 5-7% in service fees, and reject about 60% of homes. Local cash buyers are people using their own capital, no fee, and buy what iBuyers reject.
Does Opendoor really pay a fair price?
The headline offer is typically 88-92% of estimated value, but service fees and post-inspection reductions usually drop the net to 80-85%. Comparable to a local buyer on net dollars but with more process uncertainty.
What homes do iBuyers reject?
Pre-1960 homes, homes over $750K, major repairs, foundation issues, active insurance claims, tenants in place, probate, and a dozen other criteria. Local buyers buy all of these.
Why do iBuyers charge a service fee?
Their model is thin-margin, high-volume cosmetic flips. The service fee is how the unit economics work. Local buyers don't charge it because they make their money on the rehab spread.
Can I get offers from both?
Yes. Compare net proceeds after fees and inspection adjustments, not the headline offer. The number on the email is rarely the number on the wire.