Beware of the New Foreclosure Flippers

By
Real Estate Broker/Owner with Richard Weisser Realty

Beware of the New Foreclosure Flippers by Richard WeisserIncreasing property values in Coweta County Georgia over the last few years have led to a new kind of property flipper and consumers need to be wary.

These marginal foreclosures are getting a fresh coat of paint, some new flooring, and a few new shrubs planted here and there and are being offered as renovated properties.

The sellers are the former lien holders of the property. Fannie Mae, in particular, now sees its portfolio of repossessed property as cash cows instead of white elephants.

Owners have a right to dispose of their property for any price they wish. There is no law against that.

However, there IS a law in Georgia that requires the disclosure of all known adverse material defects.

There properties receive multiple inspections and examinations prior to being offered for sale. One cannot “renovate” a property without first analyzing the condition of the property and its marketability.

To offer a supposedly reconditioned property as “as-is without disclosure” flaunts the law.

Buyers should beware. These freshly painted inviting houses often have systems that are on their last legs. Remember, these were foreclosures so one can assume there was a lot of deferred maintenance.

Yet they are offered at the same price as non-distressed properties in the same neighborhood!

 

Just because a property was a foreclosure does NOT mean it is a good deal.

close

Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Raymond E. Camp 10/08/2014 10:19 PM
Topic:
Home Buying
Location:
Georgia Coweta County
Groups:
The Lounge at Active Rain
Coweta County Real Estate
"Whacked"!!!
Diary of a Realtor
Bananatude
Tags:
foreclosures
flipping
flippers
fannie mae

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Rainmaker
889,300
Sussie Sutton
UTR Texas Realtors - Pearland, TX
UTR TEXAS Realtors - Rep for buyers and sellers.

Good morning Richard.... yes flippers usually just replace the most needed things and forego other things that have a fourth of  a life left in them. 

Oct 08, 2014 10:09 PM #1
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Amanda Christiansen
Christiansen Group Realty (260)704-0843 - Fort Wayne, IN
Christiansen Group Realty

Amen Richard!  We have some of the same things going on here in Fort Wayne.  You can put lipstick on a pig...  

Oct 08, 2014 10:10 PM #2
Rainmaker
1,244,614
Raymond E. Camp
Howard Hanna Real Estate Services - Ontario, NY
Licensed Real Estate Salesperson Greater Rochester

Good morning Richard,

Besides all of your points the listing agent is the one to decide to accept the offer or not. It also seems the listing agent or its office gets most of the sales of Fannie Mae properties!

As you said buyer beware.

Make yourself a great day.

Oct 08, 2014 10:17 PM #3
Rainmaker
389,172
Laura Sellers
Berkshire Hathaway HomeServices Preferred Real Estate, Inc.; www.AuburnOpelikaALRealEstate.com - Auburn, AL
www.AuburnOpelikaALRealEstate.com

So true, Richard!!  Thanks for the reminder to be especially careful on foreclosed homes as there may be a lot of work that needs to be done and will only be discovered with inspections and a closer look at the property.

Oct 08, 2014 10:21 PM #4
Rainmaker
3,542,823
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Rich. Beware indeed. Side stepping the law isalways a concern and if it looks too good to be true....

Oct 08, 2014 10:31 PM #5
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Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Sussie Sutton ...

Which is fine as long as known adverse material defects are disclosed. Thanks.

Amanda and Jared Christiansen, YOUR Fort Wayne Realtors ...

Fannie Mae is recording billions in profits. This is a cash cow for them and hopefully someone will take the appropriate legal action to force them to disclose known defects.

Oct 08, 2014 11:17 PM #6
Rainmaker
1,016,621
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

Buyer's should always get a home inspection and in most cases a home warranty.  Better safe than sorry.  

Oct 08, 2014 11:17 PM #7
Rainmaker
1,529,176
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Geneva Financial, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

Richard: Get used to the 'Likes'; you posted another invaluable blog. I used to see these properties all the time in the Florida Market, but not so much here in San Diego County, California. I have advised several clients to keep looking when these homes are encountered. Lots of hidden and unwelcomed surprises.

Oct 08, 2014 11:43 PM #8
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Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

I entered real estate in 1989 while Oklahoma City was a robust repo market. I remember then when Fannie would do the lipstick on a pig remodel with carpet that was good for one year and vinyl flooring elsewhere thin and guaranteed to rip. We will see more repos because banks now see foreclosure as a better time value of money than short sales so expect more of these.

Oct 09, 2014 12:42 AM #9
Rainmaker
335,561
Jenna Dixon
DRA Homes | Cobb County Real Estate - Marietta, GA
Empowers You With a Better Real Estate Experience

Richard, these properties are the bane of my existence.  Buyers (especially first timers) get distracted by the new carpet and shrubs and miss the meaning behind the water spot on the ceiling!  And good luck negotiating repairs with the "seller"!

Oct 09, 2014 12:49 AM #10
Rainmaker
3,978,839
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

WE are seeing simalar things happening here in Minnesota also.

Oct 09, 2014 07:57 AM #11
Rainmaker
1,026,929
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

So many buyers get distracted by the shiny cosmetics, they forget to pay enough attention to the fundamentals...usually a good home inspection can keep them from making too big of a mistake. 

Oct 09, 2014 10:17 PM #12
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1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

Richard,

 

This speaks so strongly to buyers carefully choosing the real estate agent that they will work with.  In Coweta County, they definitely should call you!

Oct 10, 2014 10:44 AM #13
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William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Richard, I have seen this here in So Cal also. Agents need to remind these flippers that they are not excempt from disclsoure but they do try to pass themselves off as exempt by stating that the owner has never lived in the property. We both know they had the proeprty fully evaluated and what they discovered is subject to disclosure.

Oct 10, 2014 03:41 PM #14
Rainmaker
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Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

Inspect, inspect, inspect and verify the condition.

If a non disclosed issue causes a problem call an attorney.

 

Oct 10, 2014 03:49 PM #15
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