4 Tips for Buying a Flipped Home

With housing prices on the rise, investors are turning their attention to flipping homes. Home improvement stars like Chip and Joanna Gains from the HGTV show, “Fixer Upper,” make updating a home look easy.

However, completely renovating a home is anything but easy, cheap, or quick. One pitfall that some new homeowners are finding themselves in is a fixer upper disaster. The disaster is that the house they bought had hidden mechanical and structure issues that were covered up by a few cosmetic fixes. Dream homes can easily turn into a nightmare if one doesn’t know what to look for.

“Some flippers are turning historic homes into modern, hybrid treasures, but others are slapping cosmetic fixes on truly troubled properties, ignoring mechanical and structural issues. For more unsuspecting buyers, that move-in-ready dream home can quickly flip into a nightmare.” CNBC 

Buying a flipped home can be a great investment if you know what to look for and how to protect yourself. But if you are a new homeowner, you might not always know exactly what to look for.

Here are 4 tips to help you as you buy a flipped home:

#1: Work with a Trusted Realtor    

Whether you are a new homeowner or you are buying your retirement home, having the advice from an experienced and trusted realtor will be extremely beneficial. A realtor will be a great resource to know what “red flags” to look for when it comes to a home that has been flipped. Using their insights and their resources will help you avoid buying a covered up disaster.

#2: Do Your Homework

When you are interested in a home that has been flipped and new additions have been made, you need to do some homework. You want to check to make sure the flipper has done the following:

  • Used a licensed contractor
  • Upgrades passed full inspection
  • Permits on the properties and upgrades.
  • Make sure all upgrades passed full inspection.
  • Be certain the property has a certificate of occupancy

If a contractor did not obtain a permit for that addition that was put in the back, the city has legal right to ask you to remove the addition and not count it apart of your square footage. This is a huge pitfall you do not want to find yourself in.

#3: Hire a Home Inspector

When you are interested in a home, you have the right to ask to hire a home inspector. Your realtor can help give referrals to trusted inspectors. A home inspection can cost in the range of $400-$700. While this might feel hard to shell out this cost, it is a necessary expense, especially if you plan to buy a flipped home.

A home inspector is trained to look at all appliances, electrical, water heaters, plumbing, etc. If your home inspection shows problems with these areas, you can negotiate to have the issues fixed or void the original contract.In addition, have a professional termite and mold inspector come out if you suspect this could be a problem.

#4: Look for Damage

When you are looking at a home you want to buy, it is important to keep your eyes open for any possible problem. For example, look for water damage and old wiring in the attic and basement.

Another example is what happened to one young couple. When they were looking for a home, one house that they were interested in had hardwood floors were bowing. While they were not experts, it was something they noticed. It helped them to ask the necessary questions. Bowing wood floors can be a sign of moisture in the home. It clued them into asking more specific questions about flooding, leaking, and moisture in the basement.

Take Away

Buying a flipped home does not have to be a disaster. However, when a home buyer doesn’t work with an experienced realtor, do their homework by asking questions about the recent renovations, work with an inspector, and look for damage, they might find themselves in a scary situation.

If you are looking a buying a flipped home, the Jamey Kramer Group would love to help you. We want to make sure you love the home you buy on the first day, as well as, years later. We make it our job to help assist you so you do not fall into a home nightmare.