Anti-Flipping Rules

I'm amazed at the number of people who have never purchased a house before, yet they are asking about purchasing a home and selling it once they "fix it up". For example, they have a "father-in-law" who used to be a roofer, and they think they have the knowledge necessary to "fix and flip" houses after reading a book on the topic or attending a seminar. There is a lot more to "fixing and flipping" houses. I can't stress enough that "fixing and flipping" is NOT for the faint of heart. These properties are riddled with challenges. As many people who are asking about the possibility of throwing their hat in the ring, there are even more folks who have litterally lost their shirt over what seemed to be a great deal. Never mind the time, labor, and financial and capital expense, there are also government rules and regulations for fixing and flipping property. There are Anti Flipping guidelines for Conventional loans AND FHA loans too. The PMI companies have a 180 day rule for the minimum time the current owner needs to have owned the home to when they enter into a sales contract. If the time is shorter, and the current owner paid much less for the home than it is now selling for, Lenders will require very detailed documenation illustrating the cost of improvements. The appraisal will then have to note the improvements made to justify the quick sales with the increase to price. A 2nd and even a 3rd appraisal may be required to justify the sale AND, it is up to the lender’s discretion. Regardless of which side of the fence you're sitting on...Seller Beware! Buyer Beware! Sara Hibbard is a licensed Realtor in the state of Georgia. Please feel free to call Sara with any questions or concerns you may have regarding the Atlanta metro real estate market in general or specifics regarding the buying / selling process. Sara Hibbard is easily reached at 404-660-2481 or via e-mail at sara.hibbard@metrobrokers.com. Visit Sara's websites at www.SaraHibbard.com, www.Georgia-ShortSaleInfo.com, www.SaraHibbardRealEstate.com.