I have an adverse opinion to this real estate practice of buying a house, holding it for 90 days and then re-selling at large profits. I believe this practice to be dishonest and one of the reasons why market prices are so high. There are many honest 'house flippers' out there I'm sure. but for the most part an individual will buy a house knowing that there are numerous defects with the house, apply a clean coat of paint inside and out; make additional cosmetic fixes and then sell this house at a large profit to an unsuspecting buyer. while I agree that the buyer should be aware, it just doesn't seem right. What are the opinions out there?
2006-09-21 05:08:07 · 14 answers · asked by IamwhoIam 2 in Business & Finance ➔ Renting & Real Estate
some of you so far were assuming I got ripped off and have a grudge or I'm a dummy; I've come across a lot of people at work and some are even co-workers or friends who always boast how much money they are making by this practice and I've listened to their stories of how they get around the system and on and on. So far 'Mommyme' has truly understood the question and given in a most honest way her opinion; therefore I inclined to choose her as the best answer......this could go on forever!
2006-09-21 08:37:05 · update #1
I understand what you are saying. My husband and I have bought a couple of houses to flip. We complete gut them, do new wiring, new insulation, new plumbing, new sheetrock, new carpet and tile, and everything else. I think there is nothing wrong with doing it this way. But then there are those who buy the house and don't fix any of the real problems that are underneath the coat of paint they put on it, but they sell it for a huge profit. I think something should be done about this. But at the same time I feel like if the buyer doesn't know to look for the types of things like new wiring and plumbing before they buy the house, maybe it's their own fault. Mostly I think hatred for these house flippers stems from jealousy, that someone made a huge profit for very little work and being dishonest. I guess it's a free country and people are going to get away with what they can, maybe these buyers should just be better educated by their real estate agents. But then the real estate agents need to be less greedy and educated first. That's my opinion.
2006-09-21 06:48:14 · answer #1 · answered by mommyem 4 · 1⤊ 0⤋
No, it should not be outlawed. However, the unscrupulous people are the ones that probably make you think it should be. There are also different kinds of flippers. Some renovate most of all of a home, updating it and making repairs as they go along and install all new appliances. Others just paint (nothing wrong with that, unless they are trying to hide something that they should be disclosing to a new buyer) and do some renovation to improve the value and then they try and sell it to make some money. However, there are the few that buy low, do nothing to the house, and sell it within 30 days to an unsuspecting buyer at a jacked up price. This IS illegal in some places because the seller's realtor is "supposed" to be getting the best dollar possible for his/her client. When the realtor is in on the scam, she gets it sold low and then when it resells, she makes twice as much on the commission. This has happened but, I don't think it is an every day occurrence.
When you buy a home put right back on the market, that's a red flag. You should not only ask for a disclosure by the current owner but the prior one, the one that seller was given. Also, there is a good reason for a house inspection and problems covered up by a coat of paint, like a leaky roof, wouldn't fool a house inspector. You an sue the inspector if he wrote a bad report, one that failed to state any major issues.
Anyway, buying a fixer upper in bad shape, repairing it, updating it, making it shine and reselling it should not be outlawed at all. It is an honest way to not just earn a living but, improving homes is good for the community. Few people will live in a home being renovated unless they are doing the renovation and most people cannot afford to own two homes and pay two mortgages while the new house is being renovated.
2013-11-07 21:02:03 · answer #2 · answered by babyboomer1001 7 · 0⤊ 0⤋
I think house flipping is a great idea, I wish I had the money to do it. However, the housing market in my area doesn't support it. You're right there are shysters out there but as you said 'buyer beware'. Anytime you buy a house it's important that you do everything you can to protect yourself. Inspections from a qualified inspector and finding out the history of the home are two of the most important things to do. Many 'flippers' will actually go into a house and update, upgrade a property that has lost value and then sell it for a profit because they've made it more appealing. There's nothing wrong with that.
2006-09-21 12:14:16 · answer #3 · answered by i have no idea 6 · 2⤊ 0⤋
Hi there!
I understand your point of view, but if we outlawed everything that was being done illegally, by some people, and legally by others, we would just be sitting around doing nothing, I think house flipping is a perfectly resonable thing to do, and the house prices are high, because the economy is up, not solely because people flip them and sell them for higher prices, also when they flip the house the increas its value, and make it nicer, so there not just reselling the same house for more money.
But also when you do this, it makes the neighbourhood better, which makes the prices go up, but still, you cant just make it illegal, I dont understand what you mean by it should be illegal.
Regards,
Fiona
Also when your buying a house if your half way intelligent, you will get it inspected, and you will see all the faults in the house, hidden or un-hidden, the inspector knows what to look for.
2006-09-21 12:13:40 · answer #4 · answered by Fiona M 3 · 0⤊ 0⤋
In real estate it is not a buyer beware situation.
There are strict laws defining disclosure and real estate.
If defects are found and you believe you can prove that they reasonably knew about the defects, then the previous owners can be held liable for the repairs and/or the purchase contract can be null and void, resulting in recoupment of the purchase price of the property.
Also, no one is making someone pay a stupid price for the property. If the person/persons want to pay an idiotic price for the property, so be it. It doesn't mean they will be able to sell it for a profit in the near future.
2006-09-21 12:13:30 · answer #5 · answered by timc_fla 5 · 2⤊ 0⤋
Unsuspecting buyer? Do you mean the buyer who was so cheap he tried to save $500 on a $250K purchase by not hiring his own appraiser/inspector? You know, the one who also tried to save another few bucks by trusting the sellers attorney to do the paperwork instead of having it read by one his own?
I've never understood why people blame others because they were too cheap/lazy/stupid to properly research a purchase...especially one as complicated as a real estate transaction.
2006-09-21 12:42:18 · answer #6 · answered by Jim R 5 · 1⤊ 0⤋
No. They are benefitting the seller who has a problem house that he needs to dump, he benefits the new buyer by providing an updated and well thought out remodeled house at a market price, and hopefully benefits himself with salary for the time spent (profit).
If you don't like that, then you have the problem.
2006-09-21 12:18:41 · answer #7 · answered by jooker 4 · 1⤊ 1⤋
actually it is something i hope to do in the future.. i believe a buyer should have an inspection done before buying any property..if they don't it is theri own fault..sure it might be morally wrong...but so is almost everything else in the money making business these day!
2006-09-21 12:11:20 · answer #8 · answered by Machelle 4 · 1⤊ 1⤋
I agree, it sucks because it makes it even more difficult for people with real jobs, and lower incomes, to purchase a home. But I don't think it will ever become illegal.
2006-09-21 12:17:05 · answer #9 · answered by my brain hurts 5 · 2⤊ 0⤋
If that were the case, then all car dealers should be outlawed, along with any retail outlet, ebay..........etc.
Free trade rules
2006-09-21 12:12:08 · answer #10 · answered by Anonymous · 2⤊ 0⤋