HGTV house flipping shows are my weakness… I love them! Seeing an old home tuned up with brand new appliances, gleaming marble countertops, and fresh wood floors always grabs my attention. Hands down, before and after pictures are my favorite part! Have you recently fallen in love with a “flipped” home? Does the idea of moving into a cleanly renovated space excite you? Before you leap into closing on the house, there are questions and precautions you may want to consider.
“Flipped” or “rehabbed” homes are homes which real estate investors buy in order to renovate them and sell them for a profit. Sometimes these homes have been secured after short sales, foreclosures, surviving relatives, or even at auction. For real estate investors, part of the profit depends on how fast and affordably they can renovate the property. In seller’s markets, there’s even more pressure to make sure a home is ready to sell as fast as possible.
While there’s nothing wrong with a purchasing a flipped house, you will want to make sure you know a bit about the home’s history. Naturally, you’ll want to do all the due diligence you’d normally do when buying a home, but it can be useful to dig a little deeper.
Before Buying a Flipped Home
Here are some questions to ask:
- What shape was the home in before it was renovated? Was it just outdated? Vacant? Trashed by squatters? Find out the state of the home when the flipper purchased it.
- What deficiencies, damage, or other defects did the home have when the flipper bought it? Ask for a list of issues, if possible.
- Who did the work on the house during the renovation? Contractors? Handymen? Did the flipper do the work personally? Are there invoices which detail the work completed and the money spent on the repairs? Were the appropriate permits secured?
- Was anything left “as is”? What sort of issues were deemed too small or not vital to the renovation?
- What was the legal history of the transfer of ownership? Short sales and foreclosures might have legal obligations on the flipper or other liens.
All State also has provided a great article on this topic. A few points that they have made is to have an inspection, because an inspector can check to determine if any shortcuts were made. Along with this, another point made in their article is to not only research the history of the house, but also research the seller. Is their business flipping homes? Is this their first time flipping homes?
You shouldn’t shy away from a flipped home that you love, but don’t go into the situation blind. I have experience working with buyers who have purchased flipped homes, and I’d be happy to help you navigate the questions. Let’s talk! Contact me at (928) 916-1921.