{ August 20th, 2009 }
Confessions of Real Estate Professional
I’ve got a confession to make. This isn’t going to be easy, but I need to come clean: I watch Bravo’s real estate reality show “Flipping Out“. Don’t judge me, not too harshly at least.The show focuses on the life and times of Jeff Lewis, a Los Angeles real estate investor that makes his bones flipping houses, and has achieved his 15 minutes of fame by occasionally flipping out on those around him. Why I actually watch this show, I’m still not sure, but this past episode provided more than just its typical mild amusement. This week, there was an actual teachable moment for all aspiring home buyers.
It turns out that during the due diligence period, a buyer for one of Jeff’s multi-million dollar homes ordered a survey. The surveyor found that a significant portion of the deck sat on the neighbor’s property, meaning that the seller- our hero, Jeff- would have to either move the deck, or somehow come to an agreement with the neighbor to transfer that portion of the land over to him. In essence, it’s not unlike Georgia’s current water negotiations with Florida and Alabama: It’s never an easy negotiation when one party has a clear legal advantage over the other.
Ultimately- or at least within the span of this episode- Jeff’s buyer terminated the contract, and he was left with a multi-million dollar home and no buyer. Without any other option, he moved in to the home. This, I can assure you, is not a preferable exit strategy for most house flippers.
Three things to take away from this:
1. For all of his great success as a house flipper, Jeff should have known better. Don’t buy a house without ordering a survey. The cost is minimal, and it can save you a ton of money and stress down the road. It makes it much easier to enjoy your house when you know that you actually own the property that it sits on.
2. Regardless of who the seller is and what their survey says, order your own. It doesn’t matter if you’re buying a summer cottage from Chipper Jones, and he shows you a survey that was completed by the Dalai Lama. You need your own survey, done by someone that you’ve paid. You need to know about all property infringements, whether it be a deck over a property line or an easement allowing the gas company to run a giant pipe through your property.
3. Everybody is entitled to their own junk television, especially lovable yet snarky bloggers/real estate professionals.
