Don't Let 'Floppers' Flip Your House
Looking to get rid of a house that's underwater? If you're stuck with a home that's worth less than your mortgage, you could be bait for a new scam that's just starting to take hold called short-sale "flopping."
A flopper drives down the price of your home so that the lender will allow the borrower to sell your home for less than it's worth. "You have to have an appraiser involved for this [scam] to be successful," says Griff Straw, president of Solidifi. Straw does not think "flopping" can be successful without an appraiser who's willing to undervalue the property.
Once the flopper gets an agreement for the short sale he then finds a buyer (or may already have a buyer lined up) who will buy the property for thousands of dollars more. The lender takes the loss -- and possibly even the homeowner who agreed to the short sale, if there wasn't a protection against being sued by the lender for a deficiency judgment.