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First, you're looking at Zillow, or not? Or you have some non-Zillow source that told you the current owner actually paid $100K less just 10 days ago (MLS, tax records, etc)?
So you know - single story (aka ranch) homes sell for more than similar size 2-stories/1.5 story homes, especially if the others have upstairs master bedrooms.
If you're not looking for a single story home, then don't look at single story homes.
I will add this - if you're getting a FHA loan, then that property doesn't qualify anyway right now. Any flip has to be owned...90 days? (someone will correct me, as I'm not 100% sure on the # of days) before it can be resold to a FHA buyer. It's called the "anti-flip" rule.
Wow, interesting info, thanks! So we found out about the recent price history by asking the Sellers agent why this house has been listed on the market for 190 days in today's swift market. They said because it was sold during that time and re listed. I half jokingly asked if the place was haunted or had the neighbor from hell, because why else would someone buy a house and then sell it right away like a hot potato, and she confirmed it was a flip. As for what they bought it for, haven't asked for official records on that yet. Maybe zillow is wrong on the price it was actually sold for? I doubt it though. I've no trouble believing they paid cash for it which motivated the owner to sell well below original ask, slapped a coat of paint on it and put it back on the market for well above original ask. We aren't FHA buyers. We put a low ball offer in, now we wait. I'm not expecting to get it, and that's okay. It's the type of thing that would only be good at our price. We're not jumping out of our skin for it, we'd still need to pour 80K or more into it to get it up to our ideal (pool, finished basement, second bath).
As for one story, I agree with you that a sprawling one story can be just as high or higher as a multi level, but this is a very compact one story :-) It's a small house. That's okay, but not worth to me anywhere near what they're asking.
I have seen many homes successfully flipped for more money, and the value added was obvious. The home was substantially updated and presented as a better property.
I have also seen homes sit on the market for the reasons you describe in the OP. One where a seller had a life change after buying a home, but then wanted to sell it for his purchase price + new commissions and closing costs. Unfortunately, when buyers can see you just bought it two months ago, and the carpet hasn't even been vacuumed, let alone replaced, even a small increase is a tough sell.
There is also another property currently on the market here, where they did a few projects on the house, added a front porch, but inexplicably raised the purchase price over $180K. And that is not a small percentage of the total price... they bought it for 290K and now have it listed for $475K. I don't know what Zillow reports, but the MLS certainly shows this sales and price history, and there just isn't anything that would justify an increase like that. I've shown it before and now and said so in the feedback remarks to the listing agent. The agent replied "if you think it's over priced, make an offer!" (I thought maybe he wanted some help convincing his clients they are dreaming!) I said the offer would be at least $150K less than he's asking, and that's being pretty generous about the changes that have been made to the place since they bought it a year ago. I didn't hear back.
Haha, yep. This is exactly the type of stuff I'm talking about. Thanks for sharing
Since you're looking online for history, it's just as easy to search for expired listings for a home that recently sold. That will tell you the price it was previously marketed at. If none exists, the previous price is not a market price. It may have been a distressed sale. If the home had been maintained in reasonably good condition, there isn't going to be a lot of work to be done on the home. It might take 2 weeks to close on a cash sale, and another 2 weeks to do cosmetic changes and place it on the market is not unreasonable. As a rule, flippers will look for a minimum discount in the neighborhood of 20 percent and as much as 50 percent for properties in poor condition. We get these crappy postcards and form letters from cash buyers weekly. The idiots scan the databases for properties where the residence of the owner doesn't match the property address. Since our property is currently zoned as residential, we get a lot of hits.
Originally Posted by Wmsn4Life Homes are not worth what only one buyer would pay.
Wmsn4Life is correct. There are outlier buyers in either direction, but market value is based on what most buyers would pay, not what one buyer thinks. That's why you look at comparable properties, NOT at price history, when determining market value (and that's what the seller is, or should be - there are outliers in sellers, too - looking at when pricing the house, flipper or not). You may decide that just because the seller paid X for a house that it is not worth the asking price, and that's fine, but the fact is, there will be other buyers who look at the overall market, look at comparable houses that sold (sold price, NOT list price which is meaningless for these purposes), drop off the highest and lowest as outliers not indicative of the market, and get a good idea of the value of the house. Note that NONE of this involves what the seller paid for the house - that's just static that loses you houses (or buyers, if the seller paid too much and thinks that the market "owes" them a price that pays them what they think they "deserve").
What was the market when the house was purchased? What were comparable properties to it AS IT WAS THEN selling for? Was it purchased at the far low end of the market? Was it a foreclosure or a short sale or a distressed seller under pressure to sell cheap? (These are the kinds of houses that flippers generally look for - houses that are priced below market for any of a number of reasons, which is what allows them to make a profit.) All of these are factors that you don't appear to be taking into account, just what it sold for, not why.
You would do much better to stop looking backwards to the past and look at the present market for the same kind of house to determine how much it is worth, not how much the seller might be making.
I don't think you're understanding the concept that with such a short turn around, price history and comp are the same thing for this property. It is its own comp. That hurts itself.
For all those saying ownership and price history doesn't matter? There's a reason "first time on the marker in 40 years" and "buying from first owner" are lines echoed by agents trying to sell a property. It does make it look more desirable.
Well anyway ... just as their are uninformed or marginally informed buyers, there are uninformed sellers too. Lots of flippers buy in a hot market and believe that buyers will pay anything for anything. That obviously is not the case, and homes can easily be overpriced if you are not experienced with a tricky market.
Have you toured the home? Do you even know what they have done, if anything, or are you just armchair speculating over the internet? You really never know how long someone has been working on a home before the transaction went through. And sometimes two weeks is enough time to do the kinds of changes that make a buyer make a move.
Well anyway ... just as their are uninformed or marginally informed buyers, there are uninformed sellers too. Lots of flippers buy in a hot market and believe that buyers will pay anything for anything. That obviously is not the case, and homes can easily be overpriced if you are not experienced with a tricky market.
Have you toured the home? Do you even know what they have done, if anything, or are you just armchair speculating over the internet? You really never know how long someone has been working on a home before the transaction went through. And sometimes two weeks is enough time to do the kinds of changes that make a buyer make a move.
That doesn't mean it's priced right, of course.
We toured the home. It smells like paint. It's vacant. It's obviously been worked on, but isn't ideal yet. The flippers either have more work to do or are selling it half done, imo. We're told the front stoop will be replaced this week (that's worth 90K :eyeroll: ) It's nice but not *that* nice. Not to us, anyway.
That's your opinion. As a qualified buyer, I can tell you it does matter to me. I am highly skeptical that enough work was done in less than 2 weeks to justify such an increase in price.
That's you. Don't buy the house. The flippers aren't trying to get around price history. They know that many buyers don't care about price history. They aren't trying to sell to a buyer like you. They don't have to convince every potential buyer that their house is worth the asking, they just have to convince one.
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