Real Estate: NOT As Seen on TV
Real Estate: NOT As Seen on TV
Real Estate: NOT As Seen on TV!
Real estate reality TV is more popular than ever. We can watch as people hit stuff with hammers, join the journey to buy ocean front property in exotic locales, turn an unassuming ranch into a Celtic castle fit for royalty and everything in between. The only problem is, reality TV is unfortunately much different from the actual reality. Check out these top ways that reality is a far different view from the world of TV:
As Seen on TV: When house shopping, you look at 3 houses and then pick one to buy.
As Seen in Reality: Most home shoppers look at 5-8 houses before making a decision. Some buyers may look at 2 houses, some may look at 30, but many look at more than 3. Most of the home buyer shows seem to have 3 or fewer homes showcased because in reality, the buyers have already picked the house they are buying and are already in contract. The “hunting” is the TV drama that we all like to watch, but it is mostly scripted.
As Seen on TV: Flipping houses is easy, fast money and all flippers are rich.
As Seen in Realty: Being a flipper is a job and just like any job, it’s a lot of work. Successful flippers make good money, but for every prosperous flipper, there are handfuls of hopefuls who didn’t quite make it. Don’t get me wrong, flipping can be lucrative…if you know what you’re doing. It’s not as easy as it seems, it take capital, it’s not cheap and it typically isn’t as “get rich quick” as is shown on TV. Investors can spend hundreds of hours just to find the ideal property—after all, if you aren’t making money when you buy, then it’ll be difficult to make money on the flip. There will be unexpected costs during the remodel and the flipper is the one who has to pony up the dough. Many costs are often omitted from the final math at the end of an episode about a flip. An example of reality TV show math summarizes the profits like this: Purchase Price =$200,000; Rehab Costs=$50,000; Sales Price= $300,000; Total Profit=$50,000. So, the viewers see a $50,000 profit and wow, it sold in 5 days! In reality, there were likely several thousand dollars in prorated taxes, insurance, utilities, yard maintenance, real estate commissions, title fees and other closing costs (Let’s estimate these other costs at $20,000). In reality, the net profit is more like $30,000…and that is before taxes. Good money, yes; but not nearly as good as TV makes it seem.
As Seen on TV: Everyone wants a fixer upper!
As Seen in Realty: Umm, no, actually most people do not want a big project. Most buyers can’t and do not want to do a full renovation on a property. As they say, there is a butt for every seat, and some buyers want a remodel project, but buyers seeking out a fixer upper is an exception to the “average” shopper. Moving is stressful enough without adding on a complete overhaul. There is a market for remodel buyers, but it is a much smaller pool than the shows would lead you to believe.
Reality shows are fun to watch—the dramatic pauses, the creative math, the big reveals and all. They are fun to watch and typically have some useful information and clever ideas. However, they are first and foremost meant for entertainment, so much of the process (and reality, ironically) is left on the cutting room floor.
Lisa E. Priest loves a good “before and after” and is an East Texas Broker/REALTOR® with Picket Fence Realty, Inc. You can reach her via phone or text at 903-948-3343 or at BuyPalestine.com
