About Las Vegas' Blue Diamond Springs

Las Vegas Area Seller or Transaction Category #5: The "Flip"

This is part 5 in a series describing different types of sellers and transactions in the Las Vegas Area market.

The "Flipper" is a type of seller.

To "Flip" means that the property was recently purchased (at a discount) and is quickly being resold. There are two main types of "flippers" in this market:

• Those that buy directly from "trustee's sales" (foreclosure sales.) I am going to call these "Real Flips"
• Those that are trying to leverage nothing by negotiating short sale transaction - these are the most difficult to get through. I am going to call these "Flip Flops"

Real Flips are attractive to potential buyers because:

• They are usually rehabbed beautifully and have the smell of fresh paint, carpet and neutral colors.
• They usually have a quicker answer or response than REO or Short Sale

The pitfall of a Real Flip is:

• They are usually FHA financing ineligible because of deed seasoning rules.
• Some major home defects may be covered up during the cosmetic repair process

All about the "Flip Flop":

A flip flop is when an "investor" comes in to negotiate a short sale. They leverage NOTHING except the time, (maybe a little) money and effort to negotiate the short sale. They then turn around and request that a Realtor list the home on the free market to find a buyer.

Here are some potential pitfalls of the "flip flop"

• The negotiator (or flip flopper) must DISCLOSE that they are turning around and doing a "double escrow". The BANK MUST APPROVE THIS. Many times they do not know or approve it. This makes the transaction fraudulent.
• Title companies are sometimes NOT insuring the title on these types of transactions.
• Many times money is exchanged outside of escrow or "off HUD". This may be considered mortgage fraud in the eyes of the buyer's lender if the buyer is financed.

Technically there is nothing wrong with these types of transactions (the flip flop)- if they are transacted in a legal manner per the short sale contingency (bank's knowledge & approval process), state laws and the buyer's lending underwriting guidelines.

To read about more Las Vegas Area Sellers and Sales Transaction Categories Click Here!

Home sales activity in Blue Diamond Springs, a neighborhood in southwest Las Vegas, NV was disappointing in the 4th quarter with only three closings, compared to nine in the 3rd quarter. For the year, a total of 21 homes closed, up over 100% from 2006 when 10 homes sold. It is important to note, however, that 9 of the 21 were standing inventory from the builder.

Existing resale inventory of 13 homes, (plus 2 with accepted offers), represents a strong buyer's market. Homes in Blue Diamond Springs are close to all of the amenities of the growing southwest area of the valley, as well as the south Las Vegas Strip.

Here are the details of the fourth quarter sales:

(GLVAR deems information reliable but not guaranteed. Properties listed and sold by various MLS participants. Sale Price adjusted for any seller contributions. DOM = Days on Market)

Blue Diamond Springs consists of one and two-story homes from 1,106 to over 2,700 square feet, built from 2004 to 2007. For more information, or to buy or sell a home in Blue Diamond Springs, contact John Novak at (702) 339-9700 or JohnNovak@kw.com.

See also:
Blue Diamond Springs market report - 3rd quarter, 2007
Blue Diamond Springs market report - 2nd quarter, 2007
Blue Diamond Springs market report - 1st quarter, 2007

Las Vegas real estate - December, 2007 market statistics
Las Vegas real estate - November, 2007 market statistics
Las Vegas real estate - October, 2007 market statistics