Anti-Flipping

Flipping means selling real estate for an increased price after a short period of ownership.  Some types of flipping are illegal.

The typical case of illegal flipping involves a short term owner selling real property on the internet to an unsuspecting Buyer without putting substantial effort into improving the property.

Often these Buyers are from outside the Western New York area, have never seen the property and they are buying, and are relying on the misrepresentations of the Seller as to the property's condition.

Buyers should beware purchasing property on the internet.  Photographs cannot adequately depict the condition of a piece of real estate.  There is no substitute for a personal inspection of the property, and your Realtor can arrange for an inspection of it.

Buyers who have purchased illegally flipped properties frequently wind up in Court with housing code violations, often facing a demolition order, expensive repair, fines or incarceration.  Such properties are unlikely to meet cash flow projections.

Even though the Buyer has been defrauded by the Seller, New York State is a buyer beware jurisdiction, and Buyers are responsible for maintaining their property.  Assessments should not be relied upon in determining the valuation of property.  Your real estate professional can help you determine how much the Seller paid for a property by accessing public records.

Sellers should keep thorough records of all they have done to improve their property, particularly when the property has been owned a short time.  Copies of receipts and invoices must be maintained to protect yourself, and for tax reasons.  Before and after pictures should be preserved.

Contractors should be licensed in the locality where the property is located. You should ask to see a copy of the license and a certificate of insurance.  Sellers who misrepresent their property or the internet may find themselves in court.

Copyright 2007 Real Pro, Inc.