Flipping the Script: How Home Sellers Are Leaving Billions Behind

Homeowners in California who sell properties off-market to flippers—often “as‑is” and under market—can lose a significant amount each year. Here’s how it breaks down:

🔍 Estimating Annual Losses

1. Number of flips in CA

About 34,000 homes were flipped in California in 2022 wsj.com+3calhomenews.com+3resimpli.com+3.

2. Typical discount off market

Homeowners selling “as‑is” often net 10–20% less than full-market price revive.realestate+1homelight.com+1. Some cash buyers offer as little as 70% of ARV reddit.com+6listwithclever.com+6houzeo.com+6.

3. Average home value

California's typical home price is around $700,000.

📈 Calculation

• Low-end loss (10%):

  34,000 × (700k × 0.10) = $2.38 billion

• High-end loss (20%):

  34,000 × (700k × 0.20) = $4.76 billion

That suggests homeowners potentially forgo between $2.4 billion and $4.8 billion annually.

If deeper discounts occurred (e.g., 30%), losses could reach $7.1 billion per year.

⚠️ Key Considerations

• Speed vs. price: Homeowners may accept lower offers to avoid costly repairs, commissions, or extended listing times drexel.edu+5revive.realestate+5houzeo.com+5.

• Local market variance: Higher-demand, well-located properties may lose closer to 10%, while distressed or low-demand properties may lose 20–30% or more.

• Net of costs: While agent commissions (typically ~5–6%) are avoided, they don’t offset the steep markdown required by investors.

💡 Why So Many Sell This Way

Flippers often target owners under pressure—those needing fast sales, facing foreclosure, or unable to finance repairs. Often times, the sellers are elderly. These homeowners may feel "captive" and accept lower offers reddit.com+11fastexpert.com+11revive.realestate+11homelight.com+3houzeo.com+3fastexpert.com+3wsj.com+1osbornehomes.com+1.

✅ Bottom Line

In California, annual losses from off-market “flipper” sales likely range from $2.4B to $4.8B, and potentially exceed $7B in worst-case scenarios. It underscores the financial cost of prioritizing speed and convenience over full market exposure.

Let me know if you'd like a regional breakdown, trends over time, or a comparison with open-market sales!

Here’s a refined analysis of homeowner losses in San Diego County when selling below market to flippers versus open-market transactions:

📊 Closer to Home: Flip Sales vs. Open-Market Sales in San Diego County

1. Home Flip Volume

   • Nationwide, about 7 – 9% of home sales are flips; in Q3 2024 it was 7.2% nationally zillow.com+13resimpli.com+13nationalmortgageprofessional.com+13.

   • San Diego lags behind—flipping activity is below the national average attomdata.com.

   • If San Diego sees ~8% of sales flipped, that equates to roughly 845 sales/month × 12 ≈ 8,100 flips annually. Conservative range: 5–10%, or 5,000–10,000 flips/year.

2. Median Home Price (Open-Market)

   • County median: ~$945K per Zillow marketwatch.com+2resimpli.com+2attomdata.com+2sdhousingmarket.com+1redfin.com+1redfin.com+2zillow.com+2sdar.stats.10kresearch.com+2.

   • Monthly median sale price ~$997K citywide per Redfin (May 2025) redfin.com+1sdhousingmarket.com+1.

3. Discount on Off-Market Flip Sales

   • Cash buyers often pay ~10% less than market. In San Diego, cash buyers save ~$93,500 on a $935K home (~10%) housecashin.com+13axios.com+1310news.com+13.

     
     

💸 Estimated Annual Losses: Off-Market vs. Open Market

Assuming 8,100 flips annually (7.5% of ~108K annual sales), and a 10% average discount:

• Loss per sale: 945K × 10% ≈ $94,500

• Annual total loss: 8,100 × 94,500 ≈ $765 million

If the flip rate is lower (e.g., 5% flips, ~5,400 sales), total loss is around $511M. If higher (10% flips, ~10,800), losses rise to $1.02B.

🔍 Comparison: Flip vs. Open-Market Outcomes

Metric	Flip (Off-market)	Open-market
Median Sale Price	~$945K – $997K × 90% ≈ $850K	~$945K – $997K
Seller Costs	Avoid commissions/repairs	Pay 5–6% agent fees + repair costs
Net Proceeds	~$850K after discount	~$890K–$945K, less commissions (~5%)

Even after saving on commissions, open-market sellers net $40K–$90K more on a median home.

✅ Summary

• San Diego County homeowners who sell to flippers likely lose $500M–$1B annually, conservatively estimated at $765M/year, compared to listing on the open market.

• Open-market sales typically yield $40k-$90k more per home, due to higher sale prices—despite commission and repair costs.

• Flip sales offer quick access to cash and less hassle at the expense of significant financial sacrifice.

I think it's safe to say it is worth the time to discuss your sale with an experienced real estate broker before deciding whether or not to go on the open market. Reach out by contacting me on www.TamaraZrealestate.com or call (619) 865-1389.