When doing flips, what do you tell parties who are asking about price? - Posted by Vic

Posted by JPiper on May 21, 2000 at 08:55:29:

I always sell ?as is?. But my opinion is that you should go way beyond this to protect yourself. Understand that some states require certain written disclosure. Even if your state doesn?t require written disclosure, there?s a decent chance that it?s a customary practice to provide written disclosure. The old rule of ?caveat emptor??..buyer beware?.doesn?t work as well in a court today, if it works at all. I make written disclosure, and I make it liberally, bending over backwards to disclose things that I have observed. I have found that people will buy even when disclosure has been made.

But I even go beyond this. Most of the time I like a buyer to have the place inspected by a third-party inspector. In other words, I may be selling ?as is?, but I don?t preclude an inspection so that they have full knowledge of what ?as is? means. If the buyer is adamant about not hiring an inspector, I have them sign a form in which they acknowledge that they were informed of their right to hire an inspector, that it was recommended by me, and that they have declined to do so. The form even goes so far as to state that not hiring an inspector is considered a bad idea, and is not recommended.

I also have a form signed which goes through literally ever part of the house and states that I do not warranty or guarantee any part of the house. And reiterates that I have never lived in the property and therefore do not have complete knowledge of possible defects of the property. It also states that I am not an expert at detecting problems in houses and that the buyer acknowledges this.

Does this hurt selling a property? I don?t think it does. Of course understand that I sell all my own properties, and my typical buyer is someone who has credit issues and that I am usually going to help into the property in some manner?..usually carrying a second.

Now a quick story. Most of the houses I deal in are old?.and do have problems of one type or another. In one case, toward the end of a rehab I inadvertently discovered that a house had a collapsed main sewer line. I made oral disclosure of the problem to the buyer. She wanted to get into the house and I didn?t have time to remedy the problem before closing. Therefore, I made written disclosure and at the same time agreed in writing to pay part of her closing costs in payment of this problem.

Several months down the road this buyer sought out legal counsel after she had the problem fixed, since it turned out to be quite expensive?.more than what I had paid her as a remedy. Her legal efforts didn?t get past first base?.but I?d say the reason it didn?t was because of strong paperwork and disclosure.

My theory is to try to anticipate possible problems and then head them off at the pass.


When doing flips, what do you tell parties who are asking about price? - Posted by Vic

Posted by Vic on May 17, 2000 at 24:44:46:


For those of you who are doing flips, what do you tell buyers, sellers, real estate agents, etc. who ask how much you bought the property for or sold it for?

I am in process of flipping property & since all parties are aware of the flip, I have been asked by the buyer - how much I paid for it & by the original listing agent - how much I sold it for. Since I know this will all be public record pretty soon, & since I already had signed purchase agmts, I just went ahead & told them the truth.

I’m curious, what are you’ll telling people who ask this quesiton, before the sale actually closes? Are you’ll revealing all or are you holding back?


Re: When doing flips, what do you tell parties who are asking about price? - Posted by Craig

Posted by Craig on May 18, 2000 at 09:16:03:

One way to tackle it may be to just ask them “Why do you want to know that?” “Is there something you’re concerned about?”. “I am selling it for more than I am paying, however it’s my policy not to discuss my profits, or lack thereof with people”

If you’re using the owner finance sell the note at closing in those scenario’s you might be able to get away with telling them your purchase price, and then follow up with something like “However I am paying cash and the seller is not willing to offer you the same financing terms”.

Re: When doing flips, what do you tell parties who are asking about price? - Posted by Sean Cowdrey (Ventura, CA)

Posted by Sean Cowdrey (Ventura, CA) on May 17, 2000 at 19:52:37:

You could try some of the following responses:

  1. My partner(s) require that this information remain confidential.

  2. You wouldn’t believe it if I told you.

  3. Enough to keep me interested.

  4. I was always taught that it’s in bad taste to talk about the specifics of my finances.

  5. The numbers are working for everybody.

These won’t work for everybody, but I have used phrases like this in several situations, not just real estate.

Re: When doing flips, what do you tell parties who are asking about price? - Posted by JPiper

Posted by JPiper on May 17, 2000 at 01:05:02:

You’re telling the parties before you close? That’s not something I would even consider. Amazing how upset some people can get over a few bucks. I’d make it a rule if I were you NOT to tell people anything…it’s not any of their business. Only I would figure out a polite way to do it.

In an assignment it’s going to be impossible to keep the price you paid from your buyer. But there was a time I had a deal which I was assigning where the seller found out what I was assigning the property for. The guy balked…and my only way to make the deal work was to pay him off (that is, without going to court which would certainly have cost more money and might have resulted in the entire deal unraveling.)

Best choice…keep your business private. If they want to know, let them look it up in the public records afterwards.


What about doing flips - Posted by Geo

Posted by Geo on May 20, 2000 at 22:07:18:

I’m about to buy a single family home from an estate to flip (after fix-up). The sale is “As-Is”. I have already given a deposit and now have seen signs of potential problem(s). Technically, since I am buying it from a family member(executor) who claimed no knowledge of any problems (prior to signing the As-Is agreement) and since I have not lived there, I have no record or knowledge of any problems with the house. I would like to protect myself by just doing the cosmetics and re-sell “As-Is”.

Any problems with this? Will an “As-is” clause hurt my resale and will this clause protect me from someone coming back to me? Any recommendations?

Thanks for the help.