Seattle Home Inspector's Blog

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Who are we going to "Flip Off" now?

     Back in the days when the market was REALLY HOT, it seems like every-other inspection was for a home that was being "flipped."  They are not very common anymore.  These homes often had their share of issues including, shoddy workmanship and lack of building permits.  The whole idea behind the "flip" I'll flip you for the couch.was to get it back on the market as quickly as possible to maximize profits.  The only thing standing between the flipper with his flip, and the buyer was the lowly home inspector.  We often earned our fee with these houses.

     At the same time this "craze" was going on there was another craze going on---perhaps related----perhaps sort of the same thing.  While people were buying and flipping houses lenders were buying and flipping mortgages.  By all accounts this is not working out too well.  While you might be able to slop a coat of paint on a house,  blow some insulation over the knob & tube wiring and rotting galvanized water pipes, putting a gold frame on a mortgage doesn't mean the house is "actually" worth more----especially now that all the copper wire,  copper pipes and appliances have left the premises.

     It is my understanding that banks were/are able to pretty much "make up" the value of the house and sell the inflated mortgage to whomever will buy it----and then that buyer can do the same.  Am I missing something here?

     I have a "vague" idea of how capitalism works, but is it actually good judgment to allow the sale of mortgages----at least without some "honest" means of establishing "real" value?

Charles Buell  

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Comment balloon 17 commentsCharles Buell • September 29 2008 06:07PM

Comments

Great question.  I just hope that going forward the powers taht be won't forget the lessons so many have learned the hard way, lest history repeats.

Posted by Janna Scharf, Coeur d'Alene Idaho Real Estate Expert (Keller Williams Realty Coeur d'Alene) about 10 years ago

Janna, thanks for commenting----looks like the 700 billion AR gremlins are at it again with your multiple attempts to post----and repeating yourself:)  (I will delete a couple of them:)

Posted by Charles Buell, Seattle Home Inspector (Charles Buell Inspections Inc.) about 10 years ago

Charles, there ain't nothing wrong with capitalism. It's just those damn fools that partipate in greed that are ruining the economy and the financial system. We need to be flippin' those jerks off the short end of a long rope...

Posted by Bubba Fife (Complete Property Maintenance) about 10 years ago

Bubba, there are those who would say that "regulating" greed is "un-American."

Posted by Charles Buell, Seattle Home Inspector (Charles Buell Inspections Inc.) about 10 years ago

Hey, Charlie can you pull back the weeds from around that couch....It is looking like a nice one, but I need a better view.

Posted by Sean Allen, International Financing Solutions (International Financing Solutions ) about 10 years ago

Sean, I am afraid you are just going to have to bid on it like everyone else----what you see is what you get:)

Posted by Charles Buell, Seattle Home Inspector (Charles Buell Inspections Inc.) about 10 years ago

Flippin' has turned out to be not so easy.  So many bad things have gone on in the mortgage market that I can't think of anything flippant to say. 

Posted by Barbara S. Duncan, GRI, e-PRO, Executive Broker, Searcy AR (RE/MAX Advantage) about 10 years ago

Charile - 1st....I believe that's my coach!

I had this conversation today with an agent from my office who I am partnering with on a transaction. He was talking about how the market may have weeded out agents who were just around to dabble. I told him I think it weeded out some buyers too - the flippers. And the conversation led to those who thought they knew everything about how to get rich buying/selling real estate until it bit them in the butt! Sad, I've come across a few flippers lately who still think they should be able to get a return on something they bought 1-2 years ago and sunk money into. I want to tell them that if they were so smart, they would have realized like the true professionals that our local market really started changing about 3-4 years ago. BUt, there are always those who think their savvy even after it's obvious they've made mistakes!   

Posted by Carol Culkin, Overland Park (Reece & Nichols) about 10 years ago

has the auction ended or can I put a back up bid on the shed?  It is a little more modern then the last one I got.    be good cheryl (I just deleted the book I wrote in your comment section b/c I realized this isn't therapy time)Willis

Posted by Cheryl Willis, MO Broker - Mt Vernon, Monett, Aurora, Barry & Law (RE/MAX Solutions- OZARK MISSOURI) about 10 years ago

Dear Mr Charles,

I am writing this, on a laptop, in L.A. where I am participating in a wildlife commercial for the national park system. I read your blog. I can only say that you humans waste so much time and money thinking about your houses. I have enclosed a photo of my cousin, Hazelnut, whom I am staying with in L.A. This is a modest but comfortable home. You might learn from our example.

Your friend,

Nutsy

Certifried Home Inspection Assistant

Posted by Steven L. Smith, Bellingham WA Home Inspector (King of the House Home Inspection, Inc.) about 10 years ago

Barbara, before this mess is all over a lot of people will be flippin out no doubt.

Carol---dang---you caught me trying to aution your couch----is the shed OK?  You are right that the market is weeding out a lot of people in all the jobs related to real estate.

Cheryl, I have two bids so far on the shed.  Nutsy bid $10.00 which is a whole lot of peanuts for him.  His boss Steve countered with $9.00---guess we know who wears the tail in that relationship:)

Nutsy, you said "Your friend, Nutsy."  Are you sure you didn't mean "Your lunch, Nutsy."

Posted by Charles Buell, Seattle Home Inspector (Charles Buell Inspections Inc.) about 10 years ago

Hey Charles, how old is that shed? It looks like one of the houses I flipped last year.  There is actually just as much money in flipping now as there was.  You just have to be an educated buyer.  More houses on the foreclosure lists and in the tax sales for less money. 

Jack

Posted by Jack Gilleland (Home Inspection and Investor Services, Clayton) about 10 years ago

It's true, the flippers and rehabbers once were having a field day, but tougher times have weeded many of them out. The sad thing is I think it has also weeded out some good agents and some good rehabbers too. Since there is is no "sub-prime" mortgage market any more, it has also precluded a lot of buyers from purchasing a home. True, some of them really can't afford a home and are better off not having one, but on the "flip" side of the coin, there are those that can afford a home, but new regulations and requirements have been holding them back.

There is good and bad in most everything the government does. Usually when the government thinks it's time for a "correction" they end up going a little too far in the opposite direction.

Take Nutsy's" advice and buy a modest home that you can afford the payments on.

Posted by Kevin Corsa, H.I.S. Home Inspections, Stark & Summit County, OH Home Inspector (H.I.S. Home Inspections (Summit, Stark Counties)) about 10 years ago

If you ask me, I think things got a little far out of whack and of course the system was on shark attack, "meaning run while the feeding frenzy was good". Now everybody is swimming around daze and confused. But its a cleanses process needed. The strong will dominated and the weak will disappear. Does that make sense to anybody. ~ Newbie

 

                                     

P.S. I'm looking to upgrade my pad, so were do I summit my bet, the couch is included, correct.

 

 

Posted by Roy A. Peterson, P.R.E.I. (Domicile Analysis of Texas) about 10 years ago

Jack, I have an investor that I work with that is looking to do as you say.  He has a little different approach though.  Instead of looking to sell right away he is looking to rent with option to buy----sounds interesting to me.

Kevin, I may have to share with Nutsy:)

Roy, there is a whole lot of blood in the water right now.  You will have to arm wrestle Carol for the couch, and since Nutsy is now living in the shed you may have to kick him out too.

Posted by Charles Buell, Seattle Home Inspector (Charles Buell Inspections Inc.) about 10 years ago

Mr Charles,

How kind of you to invite me to lunch. I would be pleased to take you up on the offer. Would you like to meet at the park when I am back from L.A.

Your friend,

Nutsy

Certfried home inspector assistant

Posted by Steven L. Smith, Bellingham WA Home Inspector (King of the House Home Inspection, Inc.) about 10 years ago

I am glad to see that you have calmed down as far as being rude to your visitors Mr Buell.

Posted by Steven L. Smith, Bellingham WA Home Inspector (King of the House Home Inspection, Inc.) about 10 years ago

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