Are you considering buying a flipped house? Here are some ways to tell if it is a good idea or not.
If you watch popular TV shows like Property Brothers, Flip or Flop and Fixer Upper, you might believe that buying a remodeled home is a great idea. These shows always have happy endings. The process looks fun and easy, and the houses turn out beautiful. However, it is rarely this easy when buying a real-life remodeled home.
There are plenty of flipped houses that turn out to have significant problems. Contractors who do remodels sometimes rush through the job. This can lead to subpar work. While the house might look beautiful initially, problems could start to show up months later.
A flipped house can be a great deal. However, it pays to do your homework before buying one. Maintain a skeptical eye when touring the home. If you notice any of these things, move on.
Unpermitted Work
If you live in a full-disclosure state like Texas, you are in luck. Sellers are required to disclose to buyers everything that they know about the house. This should make it easy to get a list of the work that the flipper completed.
Even if you don’t live in a state that requires full disclosure, still ask for a list of work. After you have a list of the upgrades, check for permits. Most larger remodeling projects need a permit.
Avoid a remodeled home that has had unpermitted upgrades. There is a chance that it is not up to code. Aside from being a safety risk, unpermitted work can make it harder to get financing or insurance on a home.
A Flipper With A Bad Reputation
Before making an offer on a rehabbed home, ask who did the work. Learn everything you can about the person or company. Are they known for doing high-quality work?
Flippers that have solid reputations want happy customers. Most want to avoid legal issues later, which could ruin their reputation and damage their business. So, they will usually ensure that the work is up to standard.
Avoid flippers or contractors that are not well known. Many move on to the next town after the job is over and so don’t care if they leave behind unhappy customers as they won’t be around.
A Failed Inspection
Beautiful hardwood floors, countertops and shiny new kitchen appliances might make a house look like it was just built. However, most flipped houses hide a dark history. Many remodeled homes have had a substantial lack of maintenance and were in a state of significant disrepair before being flipped.
Some contractors cover up problems rather than do the extensive work needed. Therefore, it pays to have the home inspected. A good home inspector will be more likely to spot things that an average homeowner might miss.
Your trusted mortgage professional can help you get your financing in order and provide you with a pre-approval letter so you are primed and ready to make an offer on the right property for you.
Last week’s economic reports included readings from the National Association of Home Builders, Commerce Department reports on housing starts and building permits issued. Sales of pre-owned homes were reported along with weekly readings on mortgage rates and new jobless claims.
In the ideal home-buying scenario, you’d have plenty of time to find the perfect home. However, this is not always possible. Maybe you are relocating for a job and have to buy a house from across the country. If this is the case, you might have to limit the time that you spend house hunting.