Friday, October 28, 2005

Property Flipping

I drove by my old house, just to see what the new owners have done to it. To my surprise, I found it for sale! My realtor told me she thought the purchasers intended to make the home a rental property - she could tell from the financing paperwork. So I was a bit surprised to see it for sale.

I drove up and noticed the roof had been replaced. Instead of another cedar shake roof they went with a nice looking composite roof. The front yard looks the same, but they've planted more flowers along the walk to the front door. They painted the front door white to match the rest of the house.

I saw a stack of real estate pamphlets, so naturally I picked one up. I was stunned when I saw the new asking price: $475K, marked down from $485K! I just sold this home 4 months ago for about $373K?!

Those of you have have visited my previous house can check out the MLS Listing, while I can comment, since I have a unique perspective on this property.

They redid the main level - hardwood floors all throughout the kitchen, living room, and dining room. (See the main photo). The kitchen had hardwood floors before, but those were redone to match the rest of the level.

They updated the kitchen appliances and cabinets, moved the refrigerator to where the pantry used to be, and blocked the original hallway entrace to the kitchen with a wall. This new wall is where the pantry is, and what used to be the entrance to the kitchen is now a hall closet. The original hall closet was a floating island in the entryway. Also, they retiled a counter to make a breakfast bar, which looks out over the dining and living room. (See photos #4, #5, #6). They also updated the appliances, and added a microwave oven.

The master bathroom got an overhaul also: new double sink, new tile flooring, and they tiled shower unit. (See photos #10, #11).

The pamphlet said they also updated interior doors, put in all-new carpet, and added a new water heater. The new furnace I can vouch for, because I had that done when I lived there. ;) They also painted various walls and updated the fireplace mantel. If I had been able to go into the house, I would have!

I know kitchen and master bathroom upgrades are pricey, and roofs aren't cheap (but I received a bid of ~6500 to replace the roof so it wasn't that bad), but trying to sell for over $100K more? They probably put $40K into the house and are looking a quick profit of $40K or so after real estate fees. Not bad for 3 months of work and investment.

The thing is, I think they have priced themselves out of the neighborhood. Even if the home is actually worth that now, it would be a huge amount over any of the homes in the area. But, maybe the crazy real estate market will support that. A few nearby brand new townhomes were selling for about $420K as I remember. Still, those are new homes and my previous house is nearly 25 years old. Also, I think one home across the street sold last year for $410K, but that one had even more renovations, including new ceilings, and it had one more bedroom.

Good luck to them for trying to sell the house for that. I'm curious what the final selling price will be. I might ask my previous realtor to check when a sale finalizes.

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