Tips for Buying a Flipped House
Following the foreclosure crisis, a whole new crop of house flippers came onto the scene. There are thousands of homes on the market today that were purchased for a song, upgraded and updated and now hopeful buyers are interested.
Many assume that most of today’s house flippers are a savvy and innovative bunch so buying a flipped property will be a safe bet. However, as Charleston, S.C. home inspector, Bill Jacques warns, “A lot of guys who buy these homes to remodel and flip them do a good job, but there’s always going to be the person who puts lipstick on a pig and tries to sell it. They honey up these houses and paint them, put some new light fixtures in and make people think they’re new and in good shape.”
There are some definite things to be aware of before taking the plunge for this type of home. Here are a few tips to keep in mind:
- Do a little digging
Find out who did the work and how their reputations stack up. Good resources for gathering this type of information are local associations for Realtors, home builders, subcontractors and the American Society of Home Inspectors.
- Track the deed
Go to the courthouse and track down who’s holding the deed. Your goal is to find out if the seller is someone with experience in the residential investment market. Avoid newbies and anyone you suspect of cutting corners.
- Request documentation of all work done
Next, ask for documentation of all of the work that has been done. If you are not 100 percent sure that everything is accounted for, pay a visit to the local inspections office to double-check that each phase of the renovation was permitted, approved and signed off. Otherwise, you could be left holding the bag as the new owner. For example, if an addition or change was made to the home that did not pass inspection, but was completed anyway, the new owner would be stuck with removing the work and starting over. This is the type of thing that can happen when an unscrupulous house flipper is in a big hurry to sell a property and move on to the next one. Remember that unless you verify some things, everything may not be as it seems!
See related post, “What You Should Know Before Signing an ‘As-Is’ Addendum.”
- Work with pros
Always hire a professional and experienced home inspector. He or she will know where to look for common issues, structural problems and deceptive home repairs.
- Don’t get caught up in the cosmetic
Do not be fooled by new, shiny stuff, including appliances, cabinets, countertops, doors, fixtures, floors, lighting, paint and windows. While they’re all nice to have, they are mainly cosmetic fixes. Of course the home inspector will guide you on this, but ensure that all is well with the home’s plumbing, HVAC, roof, insulation, and wiring. Don’t forget to discuss other possible problems, like termites and mold.
- Know what red flags to look for
As you move through the home, channel your inner Bob Vila and think about what he would do. A pro like Mr. Vila would be checking for workmanship and telltale signs of a slap-dash job. The devil is in the details on things like how drawers and doors open and close, how flush counters, cabinets, and trim are to the wall, or how tidy tile grouting is. Even a crooked switch plate can be a red flag.
- Don’t forget to check the exterior/yard/gardens
Be sure to give little attention to the home’s yard and garden areas. Maintaining those areas is a large part of being a homeowner. Although, it is true that a home’s outside areas have little to do with how well it was renovated, they should be given some degree of consideration before an offer is made.
Be sure to consult with a licensed real estate professional, financial advisor, and tax planning professional before investing in real estate.
Subscribe To Our Newsletter
Sign up with your email address to receive news and updates.