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This is undeniably true, but from what I've seen, experienced flippers are dramatically better at making crappy work superficially look like good work than lazy homeowners are at making an unmaintained home look maintained. So I think it is more likely that someone, especially an inexperienced buyer and/or someone with a less than thorough inspector, will end up being surprised by buying a crappy house when it's a flip than when it isn't.
Actually my experience, and I have personally flipped some houses, is the opposite. The experienced ones tend to do things right and novices go for the "lipstick on a pig" approach. That being said, the response below yuor post accurately addresses your concern in regards to condition. That's why we have home inspections.
I am looking at buying a used house that sold for 43,000. After the individual bought it for 43,000 they then flipped the house and made it real nice.The house is in a so so area. How much should I be willing pay over the 43,000 now that the house has been flipped and it is real nice.
Should I be willing to pay 50,000
60,000
70,000 or more
When you buy a house that has been flipped how do you know if you would be paying to high of a price to purchase the house.
Seems like you are trying to 'set how much profit the seller should make' -- when, as others have stated, the real issue is the market value of the house.
If you want to buy this or a similar house for $43,000 and then fix-it-up and only have that set amount in the house, ... then you should do that, rather than trying to buy it from someone else who did that.
A flipped house would generally have "builder grade" materials. I would try to avoid it if I could. If absolutely required, I would pay lower than comparable sales just to account for the "builder grade" materials.
A flipped house would generally have "builder grade" materials. ...
I would pay lower than comparable sales just to account ...
What would flipped have to do with it?
You say "generally," but what if the flipper is trying to go for a "premium flip" in an improving neighborhood?
What if it is just the owner who has lived there for twenty years and put
off just about everything because they didn't care anymore, but did some
quick-and-dirty cheap repairs on things that the realtor said would stand out?
Earlier posts said:
Quote:
Originally Posted by NinaN
Get a realtor. Get comps. Make an offer. Get it accepted. Then pay for an inspector or an appraisal.
Quote:
Originally Posted by PureHapa
In either case you should have a good inspector help determine the shape of the house.
Quote:
Originally Posted by Brandon Hoffman
That's why we have home inspections.
As long as we are talking "generally" then we can say that those who do not want to pay for an inspection end up paying that cost anyway.
Most home owners when they buy a brand new house do not put high end cabinets and fixtures in them. If you show property in the newer subdivisions with those track homes, 2000 sq ft or less, starter homes or little bigger, this becomes obvious. When you do a remodel for investment purposes you have to consider the neighborhood. For neighborhoods like I just described it doesn't make you more money to put in granite counter tops, berber carpet and top of the line appliances. The house really wouldn't be worth that much more. If things are nice and new they are already better than most of the houses in the neighborhood. For a neighborhood of seventies houses plenty of them still have 70's ugly kitchens. Inexpensive new cabinets are an improvement just because they are updated. You always have to consider the competition and the consumer. In your average neighborhood high end isn't necessary.
Actually my experience, and I have personally flipped some houses, is the opposite. The experienced ones tend to do things right and novices go for the "lipstick on a pig" approach. That being said, the response below yuor post accurately addresses your concern in regards to condition. That's why we have home inspections.
Paying for a home inspection on a house that you do not purchase is the same as flushing money down the toilet. And logic dictates that you avoid it whenever possible and that includes inspecting houses that you do not believe to be of sufficient quality.
Paying for a home inspection on a house that you do not purchase is the same as flushing money down the toilet.
No it's not.
Quote:
Originally Posted by jdm2008
... logic dictates ... that includes inspecting houses that you do not believe to be of sufficient quality.
If you are going to bring logic into this then you need to know about sets and subsets.
Houses that you check out - a set of houses.
Houses that appear not to be of sufficient quality - subset 1
Houses that appear to be of sufficient quality - subset 2
Note that subset 1 and subset 2 do not have any further subsets that belong in both. They are mutually exclusive.
Houses that are in subset 2, but not desireable for other reasons - subset 3
Houses that are in subset 2, but are desireable and worth being inspected - subset 4
If you are shopping for a house and you get 9 houses inspected and decide not to buy based
on the results of the inspection, but on the 10th inspection, you buy the house, the $4,000
is a small percentage of what you paid for the house and certainly not a flushing of anything.
If you are buying a used car and spending $20k or more, if you are not qualified to judge whether
the vehicle is of good quality or not, each inspection that rejects a vehicle is worth the money.
It's the same principle. The $300-400 you spent on the inspection that kept you from buying
a "bad" house is always worth it. It's like realtor commissions. If you don't know what you
are doing when selling a house, the commission is always worth it.
I can't imagine why anyone would consider inspecting a house that appears not to be of
sufficient quality. I can't imagine why this thought even got into a discussion of inspections.
I agree with the comments before me, value boils down to a simple concept. When the dust settles, is the property worth (on the market) what the seller wants and the buyer wants to pay as compared to other like properties on the market at that time. If the seller and buyer agree on value then yes it's a good deal...
No it's not.
If you are going to bring logic into this then you need to know about sets and subsets.
Houses that you check out - a set of houses.
Houses that appear not to be of sufficient quality - subset 1
Houses that appear to be of sufficient quality - subset 2
Note that subset 1 and subset 2 do not have any further subsets that belong in both. They are mutually exclusive.
Houses that are in subset 2, but not desireable for other reasons - subset 3
Houses that are in subset 2, but are desireable and worth being inspected - subset 4
If you are shopping for a house and you get 9 houses inspected and decide not to buy based
on the results of the inspection, but on the 10th inspection, you buy the house, the $4,000
is a small percentage of what you paid for the house and certainly not a flushing of anything.
If you are buying a used car and spending $20k or more, if you are not qualified to judge whether
the vehicle is of good quality or not, each inspection that rejects a vehicle is worth the money.
It's the same principle. The $300-400 you spent on the inspection that kept you from buying
a "bad" house is always worth it. It's like realtor commissions. If you don't know what you
are doing when selling a house, the commission is always worth it.
I can't imagine why anyone would consider inspecting a house that appears not to be of
sufficient quality. I can't imagine why this thought even got into a discussion of inspections.
I'm sorry but if you are inspecting 9 houses spending $500 for each one then you need to evaluate what you are doing.
What tangible value are you getting from inspecting a house that you are not purchasing? Nothing. You are getting no house, it does not give you any relevent information for your future house search etc.
If you inspect a house and don't buy it you would have been off not bothering to inspect it and not buying it. That is a fact.
That is why people should always look at flipped houses with extra suspicion, because it is very likely it will not be of sufficient quality.
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