Cash buyers + wholesalers: what to actually expect

A cash buyer (sometimes called an investor or a direct buyer — we're one) buys with their own funds and closes in 7–21 days. They renovate or rent the property. The offer they make is the offer that closes.

A wholesaler signs a contract with you, then assigns that contract to an end buyer for a fee (usually $5–25k). The end buyer is the one who actually closes. Wholesaling is legal in Texas as of 2026 with disclosure requirements, but the practical result is: your closing depends on the wholesaler finding a buyer in the option period. If they can't, the deal falls through.

Both are legitimate businesses, but they behave differently. Always ask: "Will you be the one closing, or are you assigning?" Get the answer in writing before you sign.

Most direct buyers use a version of the 70% rule: After-Repair Value (ARV) × 0.70 minus repair costs = max offer. On a home worth $400k retail that needs $30k in repairs, that's $400k × 0.70 - $30k = $250k.

That feels like a lowball, but the math from their side is real: they're paying for the home, the rehab, the holding costs, the resale costs (agent commission!), and a 10–15% profit margin. Take any of that out and the business doesn't run.

Translation: if your home doesn't need much work, a cash offer should be 80–88% of retail. If a cash buyer offers you 60% of retail on a livable home, get a second opinion or list it.

1. Long option periods (>14 days): wholesalers ask for 30+ day option periods so they have time to find an end buyer. A real cash buyer needs 7–10 days max for inspection.

2. Tiny earnest money ($100–500): legitimate buyers put $2,000–10,000+ into escrow as a sign of commitment. $100 earnest money means the deal can vaporize at no cost to them.

3. "And/or assigns" in the buyer's name field: this is the wholesaler signature. Not always a deal-breaker, but ask before signing.

4. Pressure to skip title insurance or skip the title company: never. The title company is your protection against fraud and wire scams. Refuse to close anywhere else.

If your home is in retail condition and the market is hot, list it FSBO. You'll net more.

If your home needs >$15k of work, the market is slow, you're on a deadline, or you're managing distress (foreclosure, divorce, inheritance), a direct cash offer can net you the same or more, faster, with zero showings or contingencies. Don't dismiss it because it sounds like "less." Run the actual numbers, including 60 days of mortgage + insurance + utilities you'd carry on a slow FSBO.

Always get 2–3 offers from different direct buyers before signing. Cash offer prices vary 10–20% buyer-to-buyer for the same property. The first offer is rarely the best.