Maybe its just timing at the moment but there seems to be more ‘flipped’ houses out there on the market than normal. For those new to the flipping concept, it is this:
Buyers John and Susan purchase a home at 124 Profit Street in need of updating for $220,000.
They update and renovate the home with new kitchen, some new flooring, re-paint throughout, add a deck and re-pave the driveway.
John and Susan have the home listed 3 months later at $315,000.
The home sells. Eventually. Consider it flipped.
Now compare 124 Profit Street to 130 Profit Street just up the road.
It is being sold by its original owner. While in need of a bit of updating, it shows well and is listed at $298,000. Here is where The Flipping Deficit comes in.
For a buyer looking at the flipped house, the emotional backstory changes. Suddenly the home is simply a profit tool rather than a family home with decades of memories and goodwill. With a flip, the warm and fuzzies leave the equation as the seller is really looking to squeeze as much profit out as possible.
Enter buyer cynicism.
They will be less willing to over-look minor imperfections when the seller is looked at as someone purely motivated by the almighty dollar(s). The flipped home almost has to show better than the renovated owner-occupied home.
If it was a 100 yard dash, the owner occupied home has a 10 yard head start in the goodwill department.
We were recently showing a flipped home to some buyer clients of ours. Once they found out that the home was a flip, they actually said “ohhhh….ok. Well, it better be good then.” So yes, the home was starting the race against the other homes we were seeing that day with a 10 yard disadvantage.
So, if you’re flipping, don’t cut corners by putting in 88 cents per square foot laminate. Avoid the urge to install the cheapest bathroom vanity that exists. If you are painting the kitchen cabinets, do it properly. If you don’t know how to install trim, don’t. Hire someone. If the roof is leaking, replace it.
Renovate the home as if it is your own. …and with love.
The homes that are renovated well, sell well. Unfortunately, we all too often see renovated ‘flip homes’ that are done with shiny new light fixtures and 45 year old rusted out furnaces. Buyers, at least those with proper guidance (ie: Realtors), will see past the shine. Then the flipped home can suddenly turn into a flop.
If you would like some help whether a buyer or seller, feel free to contact us at your convenience.
Thank-you for visiting.
THEbTEAM.
Thank-you to Seth Doyle for the photo.