What Should I Know Before Accepting a Cash Offer on My House in Los Angeles?
Before accepting a cash offer on your Los Angeles home, know this: most cash buyers offer 60-70% of your home's value—that's $150,000+ below what owner-occupants typically pay for the same property. The convenience of a quick cash sale comes at a steep price. This guide explains how cash offers work, who's making them, and how to get top dollar regardless of which path you choose.
When someone offers to buy your Los Angeles home for cash, it feels like a simple decision: take the fast, easy money, or go through the hassle of a traditional sale.
But that framing is wrong—and it's costing LA homeowners hundreds of thousands of dollars.
The real question isn't "cash or market?" The real question is: "Do I understand all my options, and am I making an informed choice?"
After over a decade working with professional flippers, investors, and cash buyers throughout Pasadena, the San Gabriel Valley, Highland Park, and across LA County, I've seen every version of this decision. Families who accepted the first offer and later learned they left $150,000 on the table. Sellers who assumed their "dated" home meant they had to take an investor offer—then watched in shock as owner-occupants bid it up. And homeowners who got the speed and certainty of cash while still capturing fair value, because they understood how the market actually works.
This guide covers everything you need to evaluate any cash offer in Los Angeles: who's really making these offers, what they actually pay, how to tell legitimate buyers from wholesalers, and most importantly—the framework I use to show every seller their complete range of options. Want to see what your 4 options would look like? Call (213) 444-2225 for a free consultation.
The Foundation: Working With Investors Taught Me to Protect Sellers
I started my career working with professional flippers—people that flip professionally—who had hedge fund backing. I've been involved in hundreds of flips. Some went really well, and the investors made a lot of money. Others had structural problems, hidden damage, cost overruns.
That experience taught me exactly how investors think, how they calculate offers, and what margins they require. It also showed me how often homeowners accept offers without understanding what they're leaving behind.
Today, my approach is different. Competition will always lead to the best result for the seller. Investors prefer the exact opposite—one-on-one deals where they're the only offer. When sellers understand this, they can make informed choices rather than pressured ones.
Your 4 Options: The Framework We Use With Every Seller
Here's how we approach every situation—because you deserve to know all your choices before making a decision.
| Option | % of ARV | Buyer Pool | Timeline | Work Required |
|---|---|---|---|---|
| 1. Cash Off-Market | 60-70% | Investors only | 7-14 days | None |
| 2. As-Is Market | 76-84% | Owner-occupants + investors | 30-45 days | Basic clearing |
| 3. Light Prep | 85-92% | Owner-occupants | 45-60 days | Light work |
| 4. Full Remodel | 95-105% | Owner-occupants | 60-90 days | Full renovation |
Most people pick Option 2 or 3—and net significantly more than Option 1.
We always give sellers at least these 4 options—so they know exactly what their margins are. The key is making your choice with full information.
What This Looks Like on a $900,000 ARV Los Angeles Home
| Option | What You Do | Timeline | You Receive |
|---|---|---|---|
| 1. Cash off-market | Nothing | 7-14 days | $540K-$630K |
| 2. As-is on market | Clear, basic clean | 30-45 days | $684K-$756K |
| 3. Light prep | Cleaning, landscaping, minor fixes | 45-60 days | $765K-$828K |
| 4. Full remodel | Complete renovation | 60-90 days | $855K-$945K |
The gap between Option 1 and Option 2 alone is $54,000-$216,000. And Option 2 only requires clearing the property and basic cleaning.
This is why "should I accept a cash offer?" is the wrong question. The right question is: "Which option fits my situation, and what am I trading for convenience?"
The Two Buyer Pools: Why One Pays 15-25% More
Here's what most cash buyer content won't tell you—because most of it is written BY cash buying companies.
Pool #1: Investors (60-70% of Value)
When you accept a cash offer from an investor, you're selling to someone who needs profit margin. They're going to renovate and flip, or rent it out.
Most investors cap themselves around 68-69% of after-repair value. That's their ceiling. Their opening "home run" offer is usually 60-65% of ARV—they're hoping you'll accept without pushback.
They MUST pay less because of holding costs, renovation costs, resale costs, and profit requirements.
Pool #2: Owner-Occupants (76-84% of Value)
Owner-occupants—people who will actually live in the home—pay significantly more. Even for homes that need work.
An owner-user will typically pay 76-84% of ARV because they're going to live in it and add value themselves. They don't need investor margins. They're relying on long-term appreciation.
This buyer pool exists for homes that need work. You don't have to sell to an investor just because your property isn't perfect.
This gap is where cash buyers make their profit—and where sellers leave money on the table. On a $900,000 LA home, that's $90,000+ difference. On a $1.2 million home, it's over $120,000.
→ Read More: How Much Should a Cash Buyer Pay for My House?
What Legitimate Cash Buyers Actually Pay
If you're going to accept a cash offer, here's what you should expect from a legitimate buyer:
The Real Numbers
| Offer Type | % of ARV | On $900K Property |
|---|---|---|
| Wholesaler "home run" | 60-65% | $540K-$585K |
| Investor maximum | 68-70% | $612K-$630K |
| Owner-occupant (as-is) | 76-84% | $684K-$756K |
If someone offers below 65% of your property's after-repair value, they're either a wholesaler padding their margins or an investor trying for a home run.
Minimum Acceptable: 70% ARV
If you're going to accept a cash offer, it should be at least 70% of your home's true after-repair value—from a legitimate buyer with:
- Verified proof of funds
- 3% earnest money deposit
- 7-14 day closing timeline
- No "and/or assigns" in the contract
Anything less? You're leaving money on the table or dealing with a wholesaler.
The Risks of Accepting a Cash Offer
Cash sounds simple. But there are real risks you need to understand:
Risk #1: You're Only Accessing One Buyer Pool
The biggest risk isn't getting less money—it's only seeing investor offers when owner-occupants would pay more. On a typical LA home, this gap is $60,000-$150,000+.
Risk #2: You Might Be Dealing with a Wholesaler
Many "cash buyers" aren't buyers at all. They're middlemen who will tie up your property, shop it to real investors, and either flip your contract or bail at the last second.
Risk #3: The Last-Minute Squeeze
Wholesalers often come back demanding $25,000 price reductions right before closing—knowing you've already made plans with that money.
Risk #4: Months of Wasted Time
We have clients who come to us after 2-4 month disasters with wholesalers. Sometimes 6 months of false promises and delays.
→ Read More: What Are the Risks of Accepting a Cash Offer?
How to Tell If a Cash Buyer Is Legitimate
Before signing anything, put your buyer through this verification test:
The 5-Point Legitimacy Check
| Test | Legitimate Buyer | Red Flag |
|---|---|---|
| Proof of funds | Within 24 hours | Excuses, delays |
| Earnest money | 3% non-contingent | $1,000 or 1% |
| Closing timeline | 7-14 days | 30-60+ days |
| Contract language | Buyer name only | "And/or assigns" |
| Track record | Completed purchases | Only assigned contracts |
If you see 2+ red flags, you're almost certainly dealing with a wholesaler.
→ Read More: How Do I Know If a Cash Buyer Is Legitimate?
What Is a Wholesaler? (And Why It Matters)
Wholesalers are middlemen who get your property under contract at a steep discount, then sell that contract to an actual investor—without ever purchasing your home themselves.
They're behind most "We Buy Houses" signs. Their profit—typically $5,000-$40,000 in LA—comes directly from your equity.
The wholesaling market has exploded with inexperienced operators. There are people as young as 17 running full wholesaling operations. They're well-trained in conversations and building rapport, but many fall short in their ability to properly value properties.
When they miscalculate, that's when deals fall apart—and you're left starting over after months of wasted time.
→ Read More: What Is a Real Estate Wholesaler?
What Happens If a Cash Deal Falls Through?
If a wholesaler can't find an end buyer, you'll typically experience:
- 2-6 months of wasted time while they string you along
- Carrying costs on a property you thought was sold
- Lost opportunities as other buyers move on
- Potential title clouds if they recorded documents against your property
The recovery path? Expose the property to everyone—including owner-occupants. We're often able to get $30,000 to $100,000 over asking price when sellers come to us after wholesaler disasters.
→ Read More: What Happens If a Cash Buyer Can't Close?
Special Situations
Inherited Properties
If you've inherited a home in Los Angeles, cash buyers are specifically targeting you.
Wholesalers and investors know that successor trustees are overwhelmed—handling an estate they didn't expect while living their regular life. A cash offer that sounds "fair enough" becomes "good enough" when you're exhausted.
But "fair enough" typically means leaving $100,000-$150,000 behind.
Real example: Ted and his family in San Gabriel were considering cash offers of $750,000-$800,000. After light prep (just clearing and landscaping), they sold for $960,000—over $150,000 more.
→ Read More: Should I Sell My Inherited House to a Cash Buyer?
Homes That Need Work
The myth: "My house needs work, so I have to sell to an investor."
The reality: Owner-occupants buy as-is homes all the time and pay 76-84% of ARV. They see potential, want to customize, and don't need flip margins.
The condition of your home doesn't mean you must sell to an investor. It means you have options.
→ Read More: Do I Have to Sell to an Investor If My House Needs Work?
The Character Home Premium
If you own a Craftsman bungalow, Mid-Century Modern, Tudor, Victorian, or Spanish Revival in Los Angeles, there's something specific you need to know.
Character homes trade 10-15% higher than standard properties. Buyers pay premiums for architectural details, original features, and neighborhood character.
But investors use standard formulas. They make standard offers. They hope you don't realize your home commands a premium.
If your property has architectural significance—especially in neighborhoods like Pasadena, Highland Park, or historic areas throughout LA—a single cash offer is almost certainly undervaluing what makes your home special.
When Cash Offers Actually Make Sense
Cash offers aren't always wrong. They make sense when:
Severe property condition — Major structural issues, fire damage, or contamination that makes financing impossible and repairs impractical.
Extreme timeline pressure — Court-ordered deadlines, coordinated purchases where you need proceeds immediately, or situations where speed truly matters more than money.
Complex legal situations — Multiple heirs in dispute, title problems, or other issues that would derail a traditional sale.
Fully informed choice — You understand the 4 options, know you could get more, and consciously decide the convenience is worth it for your specific situation.
The key word is "informed." If you're accepting a cash offer because you think you have no other choice, that's not informed—that's manipulation.
What to Do Before Accepting Any Cash Offer
Step 1: Understand Your True Value
Get a comparative market analysis from a local agent who knows your specific neighborhood. Understand the after-repair value, not just current condition.
Step 2: Verify the Buyer
Require proof of funds within 24 hours. Check for "and/or assigns" language. Confirm 3% earnest money and 7-14 day timeline.
Step 3: Know Your 4 Options
Before accepting cash, understand what you'd net from each path: cash off-market, as-is on market, light prep, and full remodel.
Step 4: Make an Informed Decision
Choose the option that fits YOUR situation—with full knowledge of what you're trading.
See Your Complete Range of Options
Meeting with us doesn't cost you anything. It only takes 30 minutes for us to evaluate your property and show you:
- A true cash offer from a legitimate investor
- What your home would sell for as-is on market
- What light preparation would yield
- What full market exposure would bring
We don't operate with sales pressure. We want you to know we can be a resource to help guide you—even if it means we're not doing business together.
Already received offers? We're happy to review any contract absolutely free.
📞 (213) 444-2225 · ✉️ [email protected]
Frequently Asked Questions
What should I know before accepting a cash offer?
Know that investors pay 60-70% of value while owner-occupants pay 76-84%—even for homes needing work. Verify the buyer is legitimate (proof of funds, 3% earnest money, 7-14 day close). Understand your 4 options before deciding.
Is a cash offer for my house a good deal?
It depends on the specific offer and your alternatives. A legitimate cash offer at 70% of ARV from a verified buyer might make sense for some situations. An offer at 60% from a wholesaler who needs 60 days is almost never a good deal.
How do I know if a cash offer is fair?
A fair cash offer should be at least 70% of your home's after-repair value, from a buyer who can show proof of funds, puts down 3% earnest money, and closes in 7-14 days. Compare it to what you'd receive from an as-is market sale (typically 76-84% of ARV).
What are the disadvantages of a cash offer?
The main disadvantage is price—cash buyers pay significantly less than owner-occupants. Additional risks include dealing with wholesalers who can't close, last-minute price reduction demands, and months of wasted time if deals fall through.
How fast can a cash sale close?
A legitimate cash sale should close in 7-14 days. If someone needs 30-60 days to pay "cash," they're likely a wholesaler searching for an actual buyer.
What's the difference between a cash buyer and a wholesaler?
A cash buyer actually has funds and intends to purchase your property. A wholesaler gets you under contract at a discount, then sells that contract to someone else—pocketing $5,000-$40,000 from your equity without ever buying your home.
This article provides general information about real estate transactions in Los Angeles County. Every situation is unique. Consult with qualified real estate, legal, or financial professionals for advice specific to your circumstances.
© Justin Borges
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