Selling a home for cash in California is becoming more common, but most homeowners don’t understand how cash buyers actually work. There are different types of buyers, different processes, and different expectations — and each one comes with its own advantages and risks.
This guide explains the four main types of cash home buyers, how each one operates, and what a seller should ask when comparing them. No hype. No names. Just real, clean, transparent information.
Wholesalers — Contract First, Buyer Later
A wholesaler is someone who signs a purchase contract with the seller but does not plan to buy the house themselves.
Their goal is to assign the contract to a real buyer (usually an investor) for a fee.
What sellers need to know
They do not use their own money
They often want extra access to the home
They usually require the right to assign the contract
They may depend on finding another buyer before closing
Their timeline can be inconsistent
Good for: Homes needing work
Risk: The deal can fall apart if they can’t find a final buyer
Private Buyers — One Individual Purchasing a Home
A private buyer is a single person using personal funds or savings to buy the home.
What sellers need to know
Simple, direct process
May want inspections
Usually buys fewer homes per year
May need time for financing or partner approval
Good for: Sellers who want a straightforward transaction
Risk: They may back out if inspections reveal repairs
Flippers — Buy, Fix, and Resell
A flipper buys with the intention of renovating and reselling.
What sellers need to know
Very repair-focused
They rely heavily on contractor bids
They often use hard money loans, not cash
They may renegotiate if repairs are bigger than expected
Good for: Houses needing updates
Risk: Price changes after inspections are very common
Hedge Fund or Institutional Buyers — Big Capital Groups
These buyers pool funds from investors and purchase properties at scale.
What sellers need to know
Strong purchasing power
Typically buy homes in decent condition
Follow strict internal criteria
Often slower than advertised
May require multiple inspections
Good for: Homes in good condition
Risk: Slow process + strict underwriting rules
The Assignment Contract — What It Actually Means
An assignment contract allows the buyer to sell their place in the contract to another buyer.
What sellers need to know
Very common with wholesalers
You may not know who your final buyer is
You may see multiple new people at your house
Closing depends on third-party approval
This is not necessarily bad — but homeowners should understand how it works.
Who Actually Uses Cash? (The Truth)
Not everyone advertising “cash” is using their own funds.
Here’s the real breakdown in California:
Buyer Type
Wholesaler
Private Buyer
Flipper
Hedge Fund
Licensed Contractor-Buyer
Actual Cash Used
❌ Rarely
✔ Sometimes
❌ Usually Hard Money
✔ Yes
✔ Yes
Notes
Relies on assigning
Depends on savings
Fast but funded
Slow approval process
Usually faster & more accurate
This is why sellers should always ask:
“Can you show proof of funds?”
Who Closes Fast vs. Slow
Fast closers:
True cash buyers
Licensed contractor-buyers
Buyers who don’t need inspections
Buyers who don’t use loan underwriting
Slow closers:
Hedge funds
Buyers needing partner approval
Hard-money buyers needing appraisals
Wholesalers searching for end buyers
Who Drops the Price After Contract?
This happens when:
Buyer’s repair estimates were wrong
Buyer has no license and misjudged work
Buyer depends on resale profit
Buyer is wholesaling and lost their end buyer
This is why homeowners should always ask:
“Is your offer contingent on inspections or approval?”
The ONLY Cash Buyer Type With Licenses
Most cash buyers do not hold contractor licenses.
A licensed buyer (like Twin Home Buyer):
Can evaluate repairs accurately
Does not need to renegotiate after inspections
Understands plumbing, foundation, roofing, structural issues
Can close without partners or outside bids
A General B license + a C-36 plumbing license makes a huge difference in accuracy and reliability.
How to Choose the Safest Cash Buyer
Ask these questions:
Are you a wholesaler, flipper, private buyer, or licensed contractor?
Do you use your own funds or hard money?
Do you assign contracts?
Do you require inspections?
Do you renegotiate after walkthroughs?
Are you licensed?
Can you close on my timeline?
Can I leave belongings behind?
The answers separate the real buyers from the risky ones.
