Question about buying a flipped house?

[Robert W]

The seller bought the house in april 07 for 91,000.00
They maybe put 10,000 into fixing it up and now want to sell for 134,900. Is this justified? Can I lowball and get a much better price?
Houses in the area sell for about 20,000 less, and in response to the person who said that they thought this price was low and should have asked for more, you are an asshole, and do not know what you're talking about
It turns out that the owner of the house owns 100 rental properties across the city. The average price of a house sold in the area is 120,000. It has been listed since April 07, and the seller originally posted it for 169,000 but changed it after only 1 week.

[frankie b]

Yes this is justified. He actually is not making much money at all, this is a flip gone bad. His purchase price, had no correlation to your purchase price. If he was able to negotiate a good deal, and then sell it for a profit good for him. Its the American free market system. I have bought homes and not put a dime into them and mad 45k-50k. Its all about being a smart buyer, and obviously he was. If you are not comfortable with this look at another home.

[Spock (rhp)]

what he paid for the property and put into it is immaterial.

it'll only sell for what the market will pay. your best indicator of this is comparable properties and their actual sales prices.

if this guy is a professional flipper, you may safely bet that he knows more about the market than you do and won't take much less than his asking price -- he knows he'll get it and probably within the month.

if you're having an emotional reaction to how much money he might make instead of looking at how much comparable houses are actually selling for ... get off it. Passing this deal by because you're envious of his profit won't get you a better price on the next property you see -- that seller is probably less of a realist than this guy.

GL

[midnightrose]

The best way to put it is this: If you find a diamond ring at a yard sale and you pay $100 for it, you polish it up and clean the stone and have it appraised which costs you $10- if it appraises for $10000- does that mean you should sell it for $115? No. You would sell that thing for every penny you could get! Understand s/he has done just that. You can probably get a decent deal w/ this being a buyers market, skim a few K off the top- but that would be about it.