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  • Writer's pictureMark Buskuhl

Wholesaler vs Cash Buyer: What is the Difference?

Updated: May 18, 2023


When it comes to selling a property, you may have heard the terms "wholesaler" and "cash buyer" thrown around from "We Buy Houses" companies.


While both types of buyers are looking to purchase a property quickly, there are some big differences between them.


In this blog, we'll take a look at the differences between a wholesaler and cash buyer and the advantages and disadvantages of both.



What is a Wholesaler in Real Estate?


A wholesaler is a person who specializes in finding properties at a discount and then selling them to cash buyers or investors.


They typically put a property under contract with the intent of assigning the contract to another buyer, often a cash buyer.


Wholesalers often focus on distressed properties or properties in need of repairs, which they can acquire at a lower price than market value.



What is a Cash Buyer?


On the other hand, a cash house buyer is typically an individual or company that has the financial resources to purchase a property outright, without the need for financing.


Cash buyers are often looking to purchase properties quickly and may be willing to pay a premium for a property in exchange for a fast and hassle-free sale.


So, what are the advantages and disadvantages of working with a wholesaler versus a cash buyer?



Advantages of Working With a Wholesaler


  • Wholesalers may be able to find properties at a lower price than a cash buyer could find on their own.

  • Wholesalers can save a cash buyer time and effort by doing the legwork of finding properties and negotiating deals.

  • Wholesalers may have access to a network of investors who are interested in purchasing properties, which can increase the chances of a quick sale.


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Disadvantages of Working With a Wholesaler


  • Wholesalers will typically charge a fee for their services, which can eat into the profits of a cash buyer. This fee is not disclosed to the seller.

  • Wholesalers may not be able to guarantee that a deal will go through, as they are relying on finding another buyer to assign the contract to.

  • Wholesalers do not have the same level of financial resources as a cash buyer, which can impact their ability to close on a sale.


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Advantages of Working With a Cash Buyer


  • Cash buyers can typically close on a sale more quickly than a wholesaler, as they do not need to rely on finding another buyer. They are the best option to sell your house fast.

  • Cash buyers can often offer a higher purchase price than a wholesaler, as they are not paying a fee for a middleman.

  • Cash buyers may be more flexible in their terms and conditions than a wholesaler, as they do not need to abide by the terms of an existing contract.


Disadvantages of Working With a Cash Buyer


  • Cash buyers may be more selective in the properties they are interested in, as they are purchasing the property outright and need to ensure it meets their criteria.

  • Cash buyers may not have access to the same network of investors as a wholesaler, which can impact their ability to find properties.

  • Cash buyers may be more difficult to find than wholesalers, as most people who claim to be real estate investors are actually wholesalers.


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Conclusion


In summary, both wholesalers and cash buyers can be viable options for selling a property quickly. Wholesalers may be better suited for properties that do not need a guaranteed closing, while cash buyers may be a better fit for properties where you must sell my house fast. Ultimately, it comes down to your individual needs and goals as a seller, and what type of buyer is the best fit for your specific situation.

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