We admit, these reality TV shows about house flipping are fun to watch. But it is sometimes hard to remember just how edited they are. The whole purpose of these shows is entertainment value. Many things that are too “real” are left out or glossed over. Some TV shows about flipping have even been accused of changing numbers and not reflecting true values and purchases prices. Even if this doesn’t happen, these shows can be misleading. We have learned some lessons from TV flipping shows.
1. Things happen faster on shows than in real life. Everything in TV shows gets wrapped up in an hour’s time. We don’t usually get the background on how they found the deal or the hours they spent hunting for a good prospect. Everyone doing the repair work looks happy and clean. We don’t really get a sense of how many weekends they spent tearing out the bathroom and kitchen.
What they don’t tell you in the shows is that to complete a three-day turnaround on a big remodel, they may have contractors working around the clock, which wouldn’t happen in real life.
2. Sky high profits aren’t reality. Almost every episode leaves out costs associated with buying, holding (mortgage, if not purchased with cash, and upkeep until it sells), and selling the home. Taxes, insurance, utilities and paying a listing agent are costs that don’t often get discussed. Sometimes, the people hosting the shows have received free materials from advertisers or show sponsors, which they don’t tell you. If you had to buy the materials that they got to use for free, it would cut into your profit margin.
3. The shows have buyers lined up. Many of the shows underemphasize how long it takes to find a qualified buyer. These shows will have a home completed in time for its open house date, and by the end of the hour’s time they’ve found a buyer. Not so in reality! Some of the shows hire actors to pretend like they’re really excited about a house. Some of the people on these shows may already have a house purchase in escrow and aren’t really interested in the house they’re looking at at all. It all comes down to the fact that these shows are scripted for the most drama.
According to 2016 figures from Realtor.com it takes about 50 days to close on a home. And that’s once you find a qualified, interested buyer.
4. Most houses aren’t as fancy as the ones on TV. House flippers in Las Vegas and Southern California are often the ones highlighted on these shows. The homes can sell for more, so there’s a perception that there’s more profit in those markets. That’s not necessarily so. You might be flipping in an area where incomes are lower, loans might be harder to get, and the homes your buyer is looking at don’t come with all the fancy amenities the ones on the TV shows do.
In real life, most flippers choose very neutral finishes to appeal to the most buyers possible. On the shows, the flippers often use flashier finishes. Your market might allow for some of that, but in most places colorful finishes or those with a lot of texture are not recommended. Real estate investors who tend to “personalize” their projects in this way generally are only doing a few a year.
In a statement to Kiplinger, HGTV, which produces several popular shows including “House Hunters” and “Love It or List It,” made a statement about the behind-the-scenes aspects of house flipping that they don’t show on camera. Here’s what they said:
“Our goal is to respect the home-buying, selling or renovation process, while still creating fun and entertaining programming for viewers. When we’re telling a real estate or renovation story for television, we may abridge and adjust timelines to help manage production and time constraints. In some cases, a program is a competition series or a crazy experiment designed to play out the ‘what if’ fantasy of our viewers. Today’s viewers are savvier than ever and know that the development of an entertaining program does require the occasional use of a creative license.”
So, continue to watch the shows! But get out the popcorn and treat it like the entertainment and not necessarily educational value that it really is.