According to RealtyTrac, homes flipped in 2013 accounted for 4.6 percent of all U.S. single family home sales during the year, up from 4.2 percent in 2012 and up from 2.6 percent in 2011. There are a lot of people that are great at flipping houses, but there are some that do the bare minimum — mainly cosmetic improvements – to sell the house and make a buck. If you’re considering purchasing a flipped home, below are a few extra steps to ensure you purchase the best home for you and not one that was just cosmetically flipped.
- Do your research. Check online, ask your realtor and talk to the neighbors to find out about the house prior to the renovation. Realtors will have disclosers if the current owner received them, so make sure to ask for all documentation.
- Hire an experienced home inspector and have your inspection done as soon as possible. A home inspector will be able to tell if the work on the house was complete and done properly.
- Look for structural problems. Tip-offs include cracking in the exterior brick, evidence of tuck-pointing in the area, unleveled floors and bad finish work. If you suspect issues, consider hiring a structural engineer.
- Check for permits on the house – unpermitted work is a bad sign. Make sure the permits were pulled and closed out properly with inspections done at completion.
- Pay attention to details. Does the dryer and heater vent out of the house? Is there a new circuit breaker panel with a state inspection sticker on it? Ask to see the manuals of the new appliances as these should be on hand if they were recently bought. Check to see separate hot and cold knobs in the shower, this usually points to old plumbing.
- Who worked on the house? Find out what contractors, plumbers, electricians, etc., that made improvements on the house and check their reputations online, such as the Better Business Bureau website and Angie’s List.
- If you are considering buying a house that was up for auction, talk to your realtor about the risks. These are generally without warranty or any guarantee of clear title.
There is nothing wrong with buying a flipped house, but there are always some bad eggs in the basket. It is important to do your research, pay attention to details, and, if all else fails, ask an expert before making a commitment to buy the perfect house for you.
References:
http://realestate.msn.com/blogs/post–5-questions-buyers-can-ask-about-a-flipped-home
http://www.marketwatch.com/story/buying-a-flipped-home-be-careful-2013-08-26
http://www.zillow.com/blog/problems-with-flipped-houses-78938/
