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-You have this expectation to get a deal, despite having no home repair knowledge or real estate experience.
-You expect realtors to have experience in the costs of renovation - an entirely different field of expertise all together (general contracting) - and want that advice from them... advice that other mere mortals pay general contractors dearly for.
-You're annoyed with the idea that other people might make money you think they don't deserve.
In 10 days, a LOT can be done. Again, this is something you wouldn't know because you don't have experience in construction, plumbing, electrical, drywalling, etc. Things don't take very long, if you plan well and stay on task. Jobs often take a long time because contractors are going from job to job with the workers, keeping each pan going, so to speak. If that's focused on one project, the entire thing could be renovated in 10 days.
But even if all they did was spend $2000 to repair and paint the walls and cabinetry, put on new handles, replace the counters, light fixtures, switchplates, doors/knobs, brush the crud off the roof shingles with wire brooms, pressure-wash the exterior, and thoroughly cleaned it - knowing in that condition, the comps would make the house $90K more valuable - then GOOD FOR THEM. They saw a good deal and capitalized on it, just as you might one day... *when* you have the knowledge and experience to do so.
Rather than being resentful of other people's success, you COULD just ASK them how they did so well. That's how you start learning. I have the experience I do now because I was amazed at their skill and asked; such people often feel honored and will go right ahead and show you. You can offer to help them out for free, the next time they do a job you're interested in learning yourself. That's how you make connections and develop valuable, productive hobbies that become real skill. And it's GREAT to know that when something goes wrong, you know exactly where and why and how to fix it. HUGE problems are not, anymore.
What about when a flip IS a recent sale in the neighborhood because of a 2-6 week turn around?
I agree with you that flippers (from residential real estate to commercial businesses) don't have the best reputation and that may not always be warranted. It's sort of like how lawyers have a reputation for being unscrupulous even though there are some lawyers out there who are good people. With flipping I think the dubious reputation comes from the notion that these people swoop in with all cash offers and thereby take advantage of a desperate seller, then flip it, in this case putting as little as 10 days of work into it, and then try to take advantage of naive home buyers. I think we all understand and appreciate working for a profit, so I don't fault them for marking up the commodity, but I think the margin of profit matters. A net of 20K is fair, but 90K for 10 days of work just seems over board to most people (I think it's a sound assumption that any reno that would warrant such a hike, even with taking a reasonable profit into account, would take longer than 10 days.) I said before that I'm not out and out against buying a house from a flipper, but I'd take extra caution to make sure everything was done well, it's all legal and up to code, and my new home wasn't recently sold for in the 3's.
You don't seem to know the difference between net and gross...You have no idea what their net is.
Quote:
Originally Posted by Abby Schmitters
I figured this was coming. So what *do* agents do exactly? I've accepted the fact that they don't know this stuff, and given the fact that we will use our lawyer at close, I'm struggling to identify a need for our own agent.
Well, in my case (he is a CD user) he was able to advise us at least twice that we were looking at lipstick on a pig. He also cautioned us away from a handful of homes that seemed, (to us anyway) to be good deals by advising on very practical and obvious considerations (the neighborhood, while nice was isolated and not walkable beyond its three block purview, the style of house in a neighborhood had not done as well as other neighbors and was unlikely to change, one of the three bedrooms required walking through the other bedroom, etc...)
There is a scientific philosophy known as Occam's Razor, which essentially states that 'the simplest answer is most often correct.' Just because a person's resume or a home's history has several quick history jumps, doesn't necessarily mean that there's anything wrong with said person or house. I personally have done both. In no instance was I a bad problematic employee, nor the owner of a bad house. In all my such firsthand experiences, it was simply a matter of the job or house in question not being a good fit for me, and ultimately I moved on to something better. People have many reasons for selling their homes, many of them are personal and unrelated to condition of the house.
Just my two cents.
I know of several homes that seem to sell every 2-4 years, and each time they command a premium price. It might be they're the smallest house in a great neighborhood, and serve owners until their family expands. But like clockwork, every couple of years they hit the market, sell quickly, and sell high.
But even if all they did was spend $2000 to repair and paint the walls and cabinetry, put on new handles, replace the counters, light fixtures, switchplates, doors/knobs, brush the crud off the roof shingles with wire brooms, pressure-wash the exterior, and thoroughly cleaned it - knowing in that condition, the comps would make the house $90K more valuable - then GOOD FOR THEM. They saw a good deal and capitalized on it, just as you might one day... *when* you have the knowledge and experience to do so.
which goes back to my very early comment about HOW the current owner obtained the property. Maybe they got it at a significant discount - whether they were a "quick close cash Buyer" (We Buy Ugly Homes) or it was a distressed sale (Bank took their offer).
What was the house worth, compared to other homes, 10 days ago? Not what they paid for it.
Theoretically, the value of an EQUIVALENT home did not change much. Maybe they improved the perceived condition by $50K of market value though (regardless what they spent).
But Abby, you're also correct that you make an offer at what you feel comfortable. Maybe the owner will take their "quick nickel profit" and accept, rather than hold out for the "slow dime" buyer.
Oh my gosh, Abby. Come on. This is a business transaction, OK?
When I sold my last house, I hoped for buyers who would be good neighbors for my longtime friends next door. I hoped for someone who would love the house as we had.
But trust me ... my sole motivation was profit.
Not sure you know what the word "sole" means and why it was highlighted in my orig post. You mentioned 2 other reasons besides profit to motivate you to sell. I'll give you a 3rd -- you were moving and needed to unload your house. Selling for regular people is a means to an end. Selling for a flipper is *solely* for profit.
At least make an attempt to be consistent. You posted that he would net almost $100,000 in ten days based on the posted price he paid and his current asking price and you also stated $20,000 was acceptable. Now you are trying to say none of that matters. Which is it?
You also say "What he wants to get out of it doesn't impact what it's worth to me" but have titled your Original Post here "How do flippers overcome price history issue?" You can't have it both ways and your continuous backtracking and course changing will get you nowhere.
Once again, in case you missed it - asking price is meaningless.
Uhhh.... I never said his net profit was 100K. Or 20K. I said it was almost a 100K mark up, then separately said I don't object to a flipper profiting, but the degree of profit or attempt to profit is troublesome to me as a buyer. 20K net would be fair, but I have a hard time believing that is the case with this particular situation.
Fact: What a home sold in the past, has nothing to do with it's current value. The true market value of a home, has nothing to do with what it's market value is today. In today's market it may be worth more or sometimes less than it's last sales price.
-You have this expectation to get a deal, despite having no home repair knowledge or real estate experience.
-You expect realtors to have experience in the costs of renovation - an entirely different field of expertise all together (general contracting) - and want that advice from them... advice that other mere mortals pay general contractors dearly for.
-You're annoyed with the idea that other people might make money you think they don't deserve.
In 10 days, a LOT can be done. Again, this is something you wouldn't know because you don't have experience in construction, plumbing, electrical, drywalling, etc. Things don't take very long, if you plan well and stay on task. Jobs often take a long time because contractors are going from job to job with the workers, keeping each pan going, so to speak. If that's focused on one project, the entire thing could be renovated in 10 days.
But even if all they did was spend $2000 to repair and paint the walls and cabinetry, put on new handles, replace the counters, light fixtures, switchplates, doors/knobs, brush the crud off the roof shingles with wire brooms, pressure-wash the exterior, and thoroughly cleaned it - knowing in that condition, the comps would make the house $90K more valuable - then GOOD FOR THEM. They saw a good deal and capitalized on it, just as you might one day... *when* you have the knowledge and experience to do so.
Rather than being resentful of other people's success, you COULD just ASK them how they did so well. That's how you start learning. I have the experience I do now because I was amazed at their skill and asked; such people often feel honored and will go right ahead and show you. You can offer to help them out for free, the next time they do a job you're interested in learning yourself. That's how you make connections and develop valuable, productive hobbies that become real skill. And it's GREAT to know that when something goes wrong, you know exactly where and why and how to fix it. HUGE problems are not, anymore.
I have a sneaking suspicion if I had a male or gender neutral username, I wouldn't be called "entitled" for seeking a good deal. That's what everyone should be seeking in a transaction, including the flippers. Also, I'm not resentful of their success nor have they had success with this particular venture because the house hasn't sold. I'm merely scoffing at what they tried to do, and a few others here also saw an almost 6 figure mark up in 10 days to be worthy of an eyebrow raise. If *you* were smart, you'd see my posts as helpful to people trying to make a living as an agent or a flipper. This is gold. It's what real people think at face value and how you can get around some of their concerns.
Well, yes but 4 years is different than 10 days. The price shouldn't change by almost 100K in 10 days. While she shouldn't offer an identical number to what it last sold for several years prior, I don't think your mom is off base by using pricing history to justify offers. There's a reason it's relevant and readily handy public info to potential buyers.
I've never done a rehab as a "flip", (they were always rentals or primary residences), but I've had some good chuckles when later selling those homes - even in a pretty hot market, there's one or two "buyers" who will whip out a lowball offer based on some juxtaposition of what I paid + what they judge to be a "reasonable" profit - invariably, those go straight to the trash, usually without even countering.
It's been my experience that when a buyer or agent gets my purchase price stuck in their head, there's no point in even discussing market value - they don't *know* what market value really is. They discount the value added, neglect to reflect significant defects in the comparables & employ a circular logic to attempt to buy a fixed-up house for the same price as the "comparable" that backs up to a major road, smells like cat-pee & was delivered with a dumpster-full of trash inside.
Usually, there's an inexperienced agent representing them & when you're discussing an offer or comparables, they go silent when you start telling them the backstory (of their "comparable", or of the work done to my property). When you start rattling off actual numbers, they're just not prepared to do the math & see the value. I've never personally been able to get past that disconnect, and I don't even try very hard anymore - quite often, the ones who want to negotiate like the bald guy on "Pawn Stars" don't actually have any money anyway - they figure with their awesome "research" via zillow or tax records I should just hand them a free pony & be glad they let me walk away with enough cash in my pocket to buy some tacquitos at 7-11.
You don't seem to know the difference between net and gross...You have no idea what their net is.
I do know the difference actually. The 20K was a "for instance."
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