Mark Sainsbury: $81k profit in a day: Is this a flipping nuisance?
OPINION: How would you like to make $81,000 in a single day?
Yeah stupid question I know - but if it was something legal and accomplished by signing your name twice.
And you pocket $81,000 - that's one and half times the average annual pay in this country, so it's not insignificant money we're talking about.
The Booth family in south Auckland think so as well … they are interviewed by NZME on Wednesday expressing shock that an investor who bought their house flipped it the very same day.
The family received $819,000 for their Papakura home – and it was swiftly on-sold by the buyer that same day for $900,000.
So what's the issue here? Well first, they only discovered what had happened because the investor's lawyer mistakenly sent details of the flip to their lawyer. So if that hadn't happened they wouldn't have known and everyone would have been happy.
Certainly the family still has reason to be happy: they bought the house in 2011 for $410,000 … and listed it this year for $815,000. That's a $405,000 profit - and good luck to them.
So what's the problem here? Well the family are reportedly "shocked" and say the extra $81,000 would have been "amazing".
The family listed their home and sold it above the list price. Someone bought it and flipped it on the day of settlement for an extra $81,000 - so do they have a right to feel aggrieved that they didn't make that extra profit?
The only issue could be if the real estate agency under-sold it on behalf of the family – the fact a developer thought it was worth $900,000 lends weight to that perspective.
We may not like the process of 'flipping houses' - it may well be part of the problem pushing up prices - but what is supposed to happen?
Are we supposed to be even more appalled by the fact that the investor's name is Hua Wu and that he flipped it on to Chinese investors who only saw it once just before the settlement?
I'm not condoning profiteering - but the reality is that at this stage it's not illegal. The seller made an extra 10 percent on his purchase – and the family made nearly 100 percent.
Admittedly the flipper made it on the same day … but doesn't that make him a canny investor who saw an opportunity and pounced?
Since when did morality become a factor in the real estate game.
Mark Sainsbury hosts Morning Talk from 9am-midday on RadioLIVE.