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Location: Formerly Pleasanton Ca, now in Marietta Ga
10,352 posts, read 8,576,900 times
Reputation: 16698
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Quote:
Originally Posted by Abby Schmitters
I'm going to try my hardest to make this the very last time I repeat myself and engage in a circular debate that ran its course a long time ago and likely won't help anyone any longer. I've given up on trying to convince you of the validity of my opinion, or that others feel the same way as I do, so this will be (hopefully) a last ditch effort to at least clarify my original position.
-I don't claim to know the exact number the flipper is trying to profit. I **feel** like a 90K uptick in 10 days is extreme. I *doubt* he put enough work into it to justify the Inc. Yes, feeling and doubting are part of the buying process and I don't have to justify that to anyone.
-I don't claim flippers shouldn't profit at all, but there's a cap on it (just like most money making endeavors).
-Regardless of the upgrades mentioned impacting original recent sale price of the home, it serves to show me that I might as well buy cheap myself and be in charge of my own reno and what I'm willing to pay for each job, instead of taking on the Flipper's costs, his discretion, his taste, *and* his profit.
Flipping can be a lucrative venture if you're in a market rife with turnkey buyers, but there are obstacles to overcome. Myself and others here have told you that buyers tread carefully when it comes to flip jobs (and they're easy to spot.) That isn't going to change no matter how much you imply we're dumb and "just don't get it."
Let's get to the title of this thread you started
"How do flippers overcome the price history issue?"
People answered with logical reasons for the price difference and you responded that you **feel** differently. Why ask if you are always going to **feel** a certain way?
The more you argued how you feel versus reality, the more irrational you appeared to others here.
"I **feel** like a 90K uptick in 10 days is extreme. I *doubt* he put enough work into it to justify the Inc."
You still don't know how much he put into it. I've already explained how a lien can be a cost that you don't know about. If there was a $50k lien that had to be paid, then 389K is really 439K his cost to buy. Then it wouldn't be so much about the work in 10 days as the acquisition cost. If so would $40K meet the Abby rule of what is allowed as a profit? Just curious, what is the number for this cap you claim exists?
So far in this thread I see very few people that **feel** the same way you do. Most are rolling their eyes at you.
There is one area where i have more knowledge and experience than you: being an inexperienced, mainstream, run of the mill buyer. Which is 90% of the buyers you'll encounter. Instead of shaking your first and trying to strong-arm buyers into seeing it your way, perhaps try to understand where they're coming from so you can either meet them halfway, or avoid the pitfalls of their inexperience.
Abby decides what she'll pay. Just like "whoever you are" decides what you'll sell it for.
Oh of course you decide what you’ll pay, and what it is worth to you. But that doesn’t dictate the market, the seller accepting an offer does. And if what you’ll pay is low for market or not based in the actual costs and comparable market value of the property compared to the rest of the buying public, the asset will be consistently valued over what you decide it should be and you won’t get an offer accepted.
Lowballing can work, but it’s a slow and painful strategy if you actually want to land a nice home. Because other people want it too, and are amenable to offering more than you. That’s what we are trying to say - there is a market value of the asset, and you deciding your value for it is lower is your prerogative, but it also means you don’t purchase it because they can and will sell it for more.
Everyone has a number, but it needs to be based in realistic assessments of the property and condition. This is where a buyer’s agent can be a big help.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,352 posts, read 8,576,900 times
Reputation: 16698
Quote:
Originally Posted by Schmooky
Oh of course you decide what you’ll pay, and what it is worth to you. But that doesn’t dictate the market, the seller accepting an offer does. And if what you’ll pay is low for market or not based in the actual costs and comparable market value of the property compared to the rest of the buying public, the asset will be consistently valued over what you decide it should be and you won’t get an offer accepted.
Lowballing can work, but it’s a slow and painful strategy if you actually want to land a nice home. Because other people want it too, and are amenable to offering more than you. That’s what we are trying to say - there is a market value of the asset, and you deciding your value for it is lower is your prerogative, but it also means you don’t purchase it because they can and will sell it for more.
Everyone has a number, but it needs to be based in realistic assessments of the property and condition. This is where a buyer’s agent can be a big help.
Oh just stop it with this common sense rational post.
She won't **feel** any of it
BTW you called me out for a grammar error before. Mostly because you had no valid response and were trying to deflect on that.
Sounds like the pot calling the kettle black:
You wrote "shaking your first" I've shaken a fist, but not a first. What's that?
Funny you criticize others for something you are equally flawed at.
Fist and first is spelling, not grammar. It is a clear typographical error. You're and your indicates a lack of education. It was hardly the headline of a major point I was making to you. Just a snide aside not meant to overshadow the points I did make.
Let's get to the title of this thread you started
"How do flippers overcome the price history issue?"
People answered with logical reasons for the price difference and you responded that you **feel** differently. Why ask if you are always going to **feel** a certain way?
The more you argued how you feel versus reality, the more irrational you appeared to others here.
"I **feel** like a 90K uptick in 10 days is extreme. I *doubt* he put enough work into it to justify the Inc."
You still don't know how much he put into it. I've already explained how a lien can be a cost that you don't know about. If there was a $50k lien that had to be paid, then 389K is really 439K his cost to buy. Then it wouldn't be so much about the work in 10 days as the acquisition cost. If so would $40K meet the Abby rule of what is allowed as a profit? Just curious, what is the number for this cap you claim exists?
So far in this thread I see very few people that **feel** the same way you do. Most are rolling their eyes at you.
His lien isn't my problem. It doesn't change the value of the product to me.
I didn't ask how flippers arrive at their price. I asked how they get around it and find willing buyers with obvious issues in price history. A vocal minority of you replied emphatically that price history ISN'T an issue, that buyers aren't bothered by it, that net profit of seller isn't a buyer's business and on and on...
As for the cap, it's up to each individual buyer, the situation, what the house is worth at FMV, what the house is worth to the buyer, etc. I'm not going to assign an arbitrary number/percentage.
Yeah exactly . I recently sold my house for over 100 percent of what I bought it for 7 years ago .
I would of laughed if someone tried to offer based on my purchase price . I also spent quite a bit on repairs/updates as it was a fixer when I bought it .
Like you said comps and current market is all that matters .
Goodness gracious. I too do not factor sale prices from 7, even 4 years ago in to my assessment of what a property is worth. I'll try to explain it again. This was JUST sold ~a few weeks ago~ for 90K less than it is now listed at. WEEKS!! Not years. It was a 90K mark up with a 10 day turn around.
here's another reason to get your own Buyer's Agent. That agent would have put your offer on the standard form, and that would carry much additional weight (in theory). A written standard offer can be accepted, and a contract between parties formed. An informal email cannot. A proper, written offer would also be seen as more "serious".
They also would have followed up and kept some pressure on the Listing Agent to respond. You haven't, and can't really, and they let you hang out for several days.
This LA, or the prior LA, may have readily used your "informal offer" to call other agents who had shown the house "I've got an offer, your clients need to submit one now if they want!!" And *voila* a better, and written offer was produced. They might have even done so with another Buyer they've met ("I have one offer, do you want to write one?????") or a Buyer they represent ("I got this offer, but it sucks, but I'm required to tell my Seller. Wouldn't you like to beat it?")
IOW, you've quite possibly been used as bait, twice. This time, perhaps no one else took the bait, and so the agent is coming back to you.
I'm not sure what legalities there are in NY for how to treat informal offers from unrepresented parties. Most of it would go to the Listing Agreement with the Seller. And what was considered to actually constitute an offer.
I get it.
It's possible we end up having to use our own agent. I stand by the fact that it's not my first choice, but it's a tough market and If houses keep getting sold before we even get inside (the quality inventory), we'll have to switch up our strategy.
CD, take a page from the book of BoBromhal -- s/he got the info they wanted from me by asking questions fairly nicely, and using it as a "teaching moment" to the lurkers. The end result was one I'm guessing s/he desired -- the ornery poster who publicly stated things that may jeopardize his/her livelihood ended up conceding that sometimes it's necessary to patronize his/her services. That's how you handle it.
Goodness gracious. I too do not factor sale prices from 7, even 4 years ago in to my assessment of what a property is worth. I'll try to explain it again. This was JUST sold ~a few weeks ago~ for 90K less than it is now listed at. WEEKS!! Not years. It was a 90K mark up with a 10 day turn around.
You've confirmed the 10-day turnaround is real? If it is, I suppose I could see myself wondering how much could have actually been improved in 10 days. But I doubt papers could record that quickly.
Would it have mattered if it wasn't a flipper but a family member who bought and then sold quickly?
Edited to add...
Our current house was under-marketed and under-priced (for the seller's personal reasons) and we could have re-sold it with an easy $75-90K rake after 3- 6 months and a little TLC (we didn't). No flipping involved.
OTOH, in our search, we saw a handful of flips that really pushed the limit of nearby comps as far as value added by the flipper. But we didn't really relate it to price history so closely. It was more like "hey for the same money we could get more house and just paint it ourselves."
Last edited by elhelmete; 10-12-2017 at 01:26 PM..
Those things are the same with assessing value of any home and are independent of what the owner went through to get those things. Maybe they did it themselves, maybe they paid 10K for a professional to do it. Either way it holds the same value to me as a buyer. His liens, having to evict a tenant, and any other debt or hardship he acquired with the house don't raise the value to me as a potential buyer. Not my problem. It may justify the asking price to him, but not to me.
Why don't you just answer the question instead of going off on another tangent?
Would a new roof, new windows, new HVAC, new insulation, new paint, etc. add value to the house to you? Is any of that stuff there or are you still going by what you smell?
His lien isn't my problem. It doesn't change the value of the product to me. I didn't ask how flippers arrive at their price. I asked how they get around it and find willing buyers with obvious issues in price history. A vocal minority of you replied emphatically that price history ISN'T an issue, that buyers aren't bothered by it, that net profit of seller isn't a buyer's business and on and on...
As for the cap, it's up to each individual buyer, the situation, what the house is worth at FMV, what the house is worth to the buyer, etc. I'm not going to assign an arbitrary number/percentage.
Precisely what everyone has been trying to tell you for a week now. The value of the house is not based on what the guy paid for it or what anyone thinks he paid for it based on a figure seen online that may or may not represent what he actually paid for it. Using such a figure to determine value is a fool's errand.
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