How to Spot a Flip or "Lipstick and Rouge on a Pig"
Just for fun...apparently, the Marin PoS blog has spawned some offspring. I especially appreciate their guidelines on how to spot a house that is being "flipped" (item 12 sure sounds like a lot of houses I've seen in Marin and blogged about):
- house will usually be empty.
- if not empty, the house will be staged - look for decoration that is too perfect (a tray arranged artfully on the bed with an open book and reading glasses), new furnishing, nothing in the closets. One staged house I visited was perfect and looked lived in -- until you saw the cobwebs in the unused bathtub that the staging missed.
- crown molding
- new appliances
- the words "travertine" or "granite counter tops".
- Often the selling agent will push creative financing. I actually walked into one open house where the agent gave us the loan terms before the sheet descibing the home. The loan terms will always be the worst sort of suicide financing - I/O, Option ARMs, etc. The loan sheet will usually not describe them as such. They must figure that anyone stupid enough to $150-200K markup is also stupid enough to pay the thousands in extra fees and intrest for one of these loans.
- new baseboards
- new windows
- new door trim
- freshly painted interior
- Ask a little about why the seller is selling. When they bought it and why they are "moving" (of course they never lived there). The agent will never (my experience) tell you the home is being flipped. The answer will be something like "the owner just bought it, fixed it up and loves it, but had to move for a job."
- All this crown molding, granite countertops, etc. will be added to a crappy 1940's - 1960's tract house or a poorly built 1970's-1980's condo. Basically, lipstick and rouge on a pig.