What is a flipped home? A flipped home is a home that has been purchased, renovated/remodeled, and listed for sale at a higher price than what it was purchased for. You will find that a lot of flipped homes are purchased by investors who buy cheap properties to fix up then sell for a profit. While there’s nothing wrong with buying a flipped home, you may not realize a lot of “flippers” are eager to get this job done and move onto the next house so their work may be rushed and sub par. So, before you buy a flipped house, consider these things:
Learn all you can about the flipper – every flipper has different qualities of workmanship. There are few quality flippers and many many bad flippers. When consider buying a flipped home, have your Realtor ask:
- If this is the first home they’ve flipped.
- What contractors they’ve used.
- What materials were used.
- Exactly what was done.
Good flippers have been in the flipping business for a long time so their reputation precedes them; ask around the neighborhood, if needed. Good flippers have nothing to hide and will be able to provide proper disclosures, permits, documentation, and warranties.
Get an inspection – as with any other home purchase, get an inspection. Buying a home is the most expensive purchase most people make in their lifetime, therefore, take the time to make sure it’s worth it. Even though it’s a newly renovated house, get the work checked out. Flipped homes are usually not occupied by the flipper, so, they are unlikely to know about any defects or problems with the home. Have an inspector check the house from top to bottom.
Research the prior condition of the flipped home – Many flipped homes were bank owned/foreclosures prior to being bought/flipped. When a home was owned by a bank it was most likely unoccupied for a long period of time before being purchased. Unoccupied homes can have hard to see problems such as burst pipes, moisture leading to mold, etc.
Check for permits – Check with the city to make sure the contractor took out permits for all major work (electrical, plumbing, HVAC, structural, etc) that was completed. If permits were pulled, were they all signed off on by the city? If so, make sure to ask for copies of these permits from the building department. If you don’t get them, that could be a red flag. Any permits taken out or applied for and signed off on are on public record. Never close on a house unless all permits have been cleared. If you close on the property and the work performed was done so without a permit, the city could require you to rip out the unpermitted work and do it over with the proper permits, which could be a huge expense.
If you’re thinking about buying a flipped home, be cautious. Contact us with all questions!