Is Flipping Still Going On?

[Mrs Imp]

When Imp and I were looking for a house we spotted a lovely old cottage with exposed beams everywhere. It started off at £249,950, which was a bit much for us. The EA knew we were interested, so phoned us every time the price dropped. It eventually sold for about 190k in November last year.

I still get the property e-mails telling me what's available to match my requirements, out of curiosity. I got sent this one, which is the same cottage. The description is almost the same too, even the statement that "The cottage has been updated and improved by its current owners" which can't be true, as it was updated by it's previous owners to a standard where it didn't need any significant updating. And it's on for £227,950

Has this place been flipped? I can't see how they can make any money from flipping it. No-one will pay full asking price, and solicitors fees will be enormous.

[Telometer]

Did it actually SELL?

[Mrs Imp]

Did it actually SELL?

Yup. Check it out on nethouseprices. It's 4 St Mary's Square

[Telometer]

I can think of 5 examples that we have dealt with over the past couple of months where a house has attracted multiple offers and the agreed price has ended up over the initial asking price. Even one example of a property bought last year that we have agreed a sale at a figure 15% UP on what they paid. Crazy!

See other thread. So why not?

[Mrs Imp]

It was on for ages last time, hence the constant price drops, so it's not like there's masses of interest in it. It has no parking to speak of and a tiny garden.

Ok, so it's exempt from stamp duty, but solicitor's fees could come in at 1k for the purchase (I'm going for a high figure here as the property could have some interesting things to be sorted out) . Add on another 1k for selling, plus 1.75% to the EA. Take off 10% the price as that's what'll be offered max.

So, very roughly, 227.950 becomes 204k selling price. That means around 5k in fees, making 199k. How much to move house? How much hassle? Is it really worth it for 9k?

A 15% below asking price would come in at a loss.

Is it worth the gamble in the current market? The property had nothing to add - the kitchen and bathroom had been done, the decoration was fine. If anything HAD been done, that's yet more off any profit that might, or might not be made. The sums just don't add up.

The only thing I can think is that he sold it to his ex (distressed sale) and she's selling it now to try and get a bit more cash from it.

[Gigantic Purple Slug]

It was on for ages last time, hence the constant price drops, so it's not like there's masses of interest in it. It has no parking to speak of and a tiny garden.

Ok, so it's exempt from stamp duty, but solicitor's fees could come in at 1k for the purchase (I'm going for a high figure here as the property could have some interesting things to be sorted out) . Add on another 1k for selling, plus 1.75% to the EA. Take off 10% the price as that's what'll be offered max.

So, very roughly, 227.950 becomes 204k selling price. That means around 5k in fees, making 199k. How much to move house? How much hassle? Is it really worth it for 9k?

A 15% below asking price would come in at a loss.

Is it worth the gamble in the current market? The property had nothing to add - the kitchen and bathroom had been done, the decoration was fine. If anything HAD been done, that's yet more off any profit that might, or might not be made. The sums just don't add up.

The only thing I can think is that he sold it to his ex (distressed sale) and she's selling it now to try and get a bit more cash from it.

Even in a falling market flipping is going to happen. All that it takes are balls of steel and a consistent ability to spot bargins. Of course not all of it is going to be successful ....

Since the market is static to slightly positive (and probably will be for the next few months or so, yes boo hiss etc but I'm not going to bother arguing 4 or so indices) there is money to be made from flipping if you have the bottle.