Pro flippers increase the purchase price on their trustee deed when recording it.
According to foreclosureradar.com, the winning bid on this house was $1,014,000. But when you look at the tax rolls, the recorded trustee deed says $1,114,000. It’s done to narrow the gap between purchase price and flip price and, as a result, soften the buyer’s objection to the profit being made by the flipper:
Power red tie, JtR! Now you’re ready for 2012…
How could the tax role price be different from the actual purchase price?
That house has one super traditional fireplace and then a modern one in the master bedroom. And then there’s an 80s (?) kitchen with granite countertop. The incoherence of it would drive me crazy.
How do they do that? My next house I will lower the price by $100,000 to save some property tax. Does the Realtor need to be in on the scam?
No way am I going to make someone appx 500k profit. To hell with this flipper.
I guess they see it as a harmless trick to improve the emotional appeal of a property. I would think a logical buyer is not that concerned with the price paid, but would do a full inspection and evaluate it rationally as they would any other home. Or does the previous owner’s profit really factor in.
For a professional flipper, the finishes and colors are awful. Nice layout and property though.
450/sq foot for east of the 5? no way.
Apparently the most successful flipper has no problem lying.
I could live there, just can’t pay for it. 😉
The reason flippers can change the sales price is because when you buy a property at a trustee sale, the actual document (trustee’s deed) gets mailed to you 7-14 days later by the trustee. You have to record it yourself, so when they take it down to the recorder’s office the new owner fills out the form to declare the price paid. The tax assessor then collects property taxes based on that amount.
When regular people buy a house, the escrow company takes care of it for you, and they usually gets the price right.