I've been giving a lot of thought lately to "Flippers," you know the people buying up short sales and REO's and then reselling them.
If there was a higher bidder out there for these properties, why do the flipper end up with the properties? Is it possible that they are in fact the highest ready, willing and ABLE buyer? Key word here is able as there are fewer and fewer ABLE buyers today, what with the credit tightening, unemployment, etc.
When they buy a property it is counted as a closed sale. When they turn around and resell the property it is counted as ANOTHER closed sale. Where would today's housing numbers be if all of these deals were taken out of the count? So we have some properties selling multiple times and most properties not selling at all - perhaps those sellers should learn more about my buddy Kirk Nace's 6 Week Listing Strategy (http://www.6WeekListingStrategy.com )
IF short sale flippers went away, foreclosures would skyrocket even higher. What impact would that have on prices, on government (read this as tax payers getting screwed even more) bailouts, etc?
When flippers purchase REO's rehab and then resell them, someone is doing the rehab. Doesn't that help keep some people working?
When a short sale doesn't sell it usually becomes a foreclosure. This hurts the homeowner, it hurts the neighborhood, it hurts the lender, the mortgage insurer, the noteholder and countless others, yet we look at those who have created a business around buying distressed properties and reselling them as vultures or parasites. Imagine a world where nothing existed to clean up dead animals - they just pile up and rot, pretty nice image huh? it's a shame we don't have smellavision for you! Yes these flippers may be cleaning up the dead, and yes it's a valuable service.
It's always bothered me that these flippers get such a bad wrap, now that I've thought about it, I am simply shaking my head and realizing that they are serving several valuable functions and yet are unappreciated.
