Are they still flipping or flopping in Charleston South Carolina real estate?
What are people thinking when they purchase a house and 45 days later with no indicated improvements put it on the market for sale for 7.7% more than they paid? Is this another flip ready to flop in the Charleston South Carolina real estate market or are some people really that smart and are going to make lots of money with no risk.
Sorry, not a chance. 
Here is the story, I look through the "hot list" provided by the Charleston MLS just about every day and all MLS activity is available. New listings, price changes, under contract, sold, withdrawn and expired are there for all the real estate agents to see what is happening on the market. I'm reviewing the new listings and what do I see but an address I showed to several buyers recently come up as a new listing. I thought it was under contract but it might have fallen through and of course some agents "freshen" up their listings by withdrawing them and then putting them out as new listings thinking that no one will notice the house has been on the market for the last year.
Surprise, we know.
Sadly, it is the public that might not and if you don't hire a buyer's agent to represent you, don't expect to know either. The listing agent can honestly tell you that the house came on the market just a week ago and not bother to tell you that the house has sat unsold for however long. Although it isn't the case here, I just put that in as a reminder to those who think they can have all the real estate information they need in order to make a good decision and save money by doing it themselves that they really should be represented and the cost is much less than they think.
In this case, one of two things happened. Either the buyers moved in and got their mortgage statement and said, "what, we can't afford this place, we've got to sell before the bank takes it back" or they bought it at what they considered a "steal" and turned around and put the house back on the market and tacked on $50,000 for their trouble for taking title.
Let's assume it's number 2 and they are trying to flip this house because I've seen it tried too often to think otherwise. Now, let's examine the risk / reward of such an effort.
It doesn't have a chance. What's that old saying, "slim and none and slim left town." This is it.
It is a beautiful house in a beautiful neighborhood, Rivertowne Country Club in Mount Pleasant, 2800 square feet, 4 bedroom, master down, gourmet kitchen, endless views of the marsh. I showed the house to several potential buyers. If it wasn't a nice home, I would never have shown it a second time.
The only negative that my buyers found with the home when they viewed it was that it was missing one extra room on the main floor that could be used as a home office. As it happens, I met the original owner and he asked my feedback and when I told him, he said that was why they were selling and building around the corner, they also discovered they needed an extra room and an additional 400 square feet.
OK, it was originally listed at $689,000, reduced a little bit considering the current Charleston real estate market but it did go under contract and it closed at $650,000. Not bad. It sold, other homes around Charleston are sitting with cobwebs growing around the for sale signs.
And now it is on the market for $699,900. Buy me. Let's analyze the risk reward.
Assuming a full price sale and that the sellers are paying what 60 Minutes called a sacrosanct commission of 6%, the net to the seller is $658,000. Maybe the listing agent is taking a little less, after all, he/she was the buying agent only 45 days ago but they are offering 3% to the new selling agent. Call it 5.5% and the net to the seller is $661,500.
Did 60 Minutes pay any attention to how real estate commissions are not sacrosanct at 6% after all, that the commission is negotiable and a smart real estate agent will offer a savings to a distressed or repeat client?
No, that wouldn't have made a good story for CBS or 60 Minutes, it was much easier to bash all Realtors as overpriced and side with Redfin who only tells the story they want to tell and the consumer wants to hear.
OK, that's old news so let's get back to our flop. Unless the buyer falls in love with this house and offers full price and doesn't try to negotiate a slightly better price, it realistically will not sell at $699,900. Current statistics for the Charleston South Carolina real estate market have homes selling for approximately 4% below list price. So let's take 4% off, the agreed upon price is now $672,000, less 5.5% commission is $635,000 and another $2500 in seller closing costs takes it to $632,500.
Of course, that is only valid if there is a contract NOW. The seller has carrying costs on the house, after all, the mortgage, insurance and taxes have to be paid for every month the house is in their possession. Even with the craziest loan on the planet, they have to pay at least $3000 per month so let's round down to $630,000.
Didn't I say that they paid $650,000 just 45 days ago? I thought so, and therefore, this deal is DOA. You have to feel sorry for anyone who put themselves in this predicament and I certainly don't mean to poke fun at anyone facing a financial hardship. I always try to write with a sense of humor to make it interesting for my readers and it is not my intent to make fun of anyone.
Let's wrap this up with an update on flip/flop, part 3, or I guess this makes it part 4 and the finale will be part 5. The flip / flop house in my neighborhood finally went under contract after 5 months on the market. List price was eventually reduced from $329,900 to $309,900. The price paid back in November was $295,000. At $309,900, there isn't much margin with 5 months of carrying costs, real estate commission and closing costs to be considered. Was it even a full price offer? I doubt it but I'll keep you updated.
The same reminder as before, if you want to flip for a profit, not break even or lose money, you can. But please understand, you have to buy low and add value to sell high. Taking possession and title does not increase the value of the house because just because you need it to.