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Health & Fitness

Costs Associated with 'Flipping a House'

Brought to you by Patch & Jennifer Daywalt, Realtor w/14 years Real Estate Experience. Submit your questions to Sellinghomesjenn@aol.com. All questions will be answered in this forum.

When making a decision to flip a house what are the costs that should be examined?

The costs you should review would be the price paid for the house, the closing costs on the buying and selling side of the transaction, the cost to renovate the property, the holding costs (taxes, mortage (if attached to house), utilities) that will be necessary until the sale of the home as well as capital gains tax if that will be required.  You should always plan on 10% above what you feel the renovation costs will be as you don't always know what will be involved until you start them.

A few tips when putting an offer in on a home that needs work and if you plan on flipping it.  Most offers that get accepted on these properties are cash deals and they have no inspection contingencies with a quick settlement.  I am not suggesting you do not have a home inspection however if you have a construction background or someone who does you may want to bring them with you. 

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Many homes are selling in my area yet mine remains on the market.  It shows well according to the feedback but I don't have an offer yet.  Should I take it off the market for a period of time and re-list it so that it looks new on the market?

The fact that the feedback states that house shows well yet you have no offers immediately tells me you are priced too high.  I do not know how many showings you have had or how long the house has been on the market.  Speak to your agent about ideas or if they feel a reduction in price is needed at this time.

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When you speak of taking your house off the market, I believe you are looking at restarting the clock on Trend.  Remember your house has to be off the market for 30 days for this to occur and the Realtors will still know how long it was on the market previously.  A better stragegy would be to reduce the price to create a demand for the house.  We are in a good market and homes are selling.

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