Home buyers often make the mistake of assuming that a recently renovated home is the same as a brand new property. They see buying a flipped home as a problem free and ready to move in home solution. Newly renovated homes often sell for top price, due to the buyer’s belief that the property is turnkey and ready to move in.
Buying a renovated home being flipped can be a good choice for those who want a move in ready option, but buying a flipped home has its dangers. One should due their due diligence and get a full home inspection for the property, make sure that all of the renovations were properly permitted, and research the property flippers and contractors.
House flipping shows are very popular on TV and make the process of transforming a home seem quite easy. However, TV shows do not stick around long enough to show how the home holds up after a buyer moves in, strong weather, and unavoidable wear and tear.
Property flippers and contractors are often keen to move on to the next property as soon as possible. While others can find hidden issues that require greater expense, resulting in them going over budget. Work on the home can often be rushed as a result.
If you are thinking of buying a flipped home, one that has been purchased by the seller within the last year, the tips below will help you avoid any distressing problems down the line.
Concentrate on the details
While new bathrooms, kitchens, and appliances will draw your attention, try to look beyond at the quality of the workmanship. The details will reveal how well the work on the property has been completed.
The signs of rushed work include:
Slanted or unevenly spaced bathroom tiles
Doors that do not close flush to the door frame
Gaps between the wall and countertops
Light switch plates that are slanted or not flush to the wall
Any cosmetic mistakes could be an indication of bigger problems that cannot be easily spotted by the untrained eye. If the house flipper little attention to the details, you should make sure to check the plumbing connections, the gas line to the water heater, and the electrical panel. Lack of attention to detail can often times signal lack of attention to other more significant areas of your home.
Make sure you have a full inspection of the property
When buying a flipped home one often make the mistake of assuming a newly renovated property will be in brand new condition. Don’t make the same mistake and be sure to get a quality inspection done.
Get more than a basic 4-Point inspection. This limited inspection cover only the plumbing, electrical, HAVC (heating & a/c), and roof. 4-Point inspections are the standard inspections required by insurance companies. Buyers often opt for getting only this inspection because it saves a few hundred dollars. Often, this works fine, but when buying a flipped home deeper issues may be covered up by surface renovations, therefore, it’s important to order a full inspection.
An inspector will be able to check the quality of the contractors work, and find any hidden issues that the buyer may not see. Has the contractor completed the work thoroughly or tried to get away with the minimal amount due to the desire for a short turnaround on the property? Have the renovations been completed in compliance with code?
The local area authority will have signed off on the renovations, but officials are strictly looking at issues concerning health and safety. A home inspection will give a complete overview of whether the property is up to scratch.
Buyers that are purchasing a flipped home should make sure to fully review the disclosures. Were the correct permits taken out and signed off for the work that has been completed?
Make sure you receive copies of all work approvals and finalized permits. If you don’t receive them, you can look for them online or at the local building department. All permits that are applied for and signed off on are a matter of public record.
Always ensure that all permits are cleared before closing on a property. As the new owner, you could be liable for any unsafe or illegal work.
Research the flipper
Find out as much information as possible about the seller. Are they an experienced contractor? Do they have a positive reputation in the community? Your estate agent can help you find information relating to the seller.
Good contractors and investors have been flipping properties for some time, and have an established reputation. A property flipper with a strong track record should be open and clear with disclosures, documentation, and even provide warranties. A good home flipper is interested in maintaining their reputation as well as accumulating satisfied customers. They don’t want complaints from buyers, legal issues, and a bad reputation.
The last two years have seen a significant increase in homes being purchased for the purpose of renovation followed by resale. Improvements can be completed to a high standard, but there is a chance the contractor was over budget or short on time. Properties that have renovation rushed can leave the new owner with plenty of problems.
Flipped properties should be checked over top to bottom by a trained expert that knows what they are looking for. Poor workmanship can cost money and the peace of mind of the new owner. Take care when buying a flipped home.
About the Author: Oscar Blasingame is a practicing, Florida attorney, Real Estate Broker, and Florida Supreme Court Certified Mediator. He began working in real estate as a Realtor in 1994 and later went on to become a real estate attorney in 2002. He is currently the managing broker and CEO of DSCVR Realty in St. Petersburg, Florida. From 2002-2005 Oscar was the sales director for Ballast Point homes LLC. During his tenure with Ballast Point Homes, he managed a sales team that produced over 55 million dollars in condominium and townhome sales. With over twenty-five years of experience, Oscar represents buyers, sellers, business owners, other Realtors, and Brokers with professional, personalized service. In addition to residential sales, as an attorney, Oscar practices real estate and small business law and prepares and negotiates many commercial and residential contracts and leases. He prefers to focus on residential and income property sales in St. Petersburg and the beaches. A native of St. Petersburg, Florida and a second-generation Gator, he received a B.A. from the University of Florida and a J.D. from Stetson University’s College of Law.