Buying a flipped house can be a way to find a home with newer finishes that is still within your price range. Many buyers are wary of horror stories they have heard about buying a flipped house that was done with shoddy workmanship. If that’s you, keep reading for some things to be aware of as you move forward with the process.
One of the most important factors is working with an experienced agent you can trust. If you’re looking for one, reach out to your local real estate agency.
What is a flipped house?
A flipped house is one that was bought with the intention of quickly renovating and selling for a profit. In some cases, this means the investor may have cut corners to maximize profit and expedite the process, while in other cases it means getting a move-in ready home with brand new finishes for a much lower price than a new construction home.
Not all flipped houses are equal, so make sure you are prepared with the right information to avoid ending up with buyer’s remorse.
Advantages of Buying a Flipped House
Buying a flipped house can offer some distinct advantages. If you like the idea of a house with brand new finishes, appliances that have never been uses, flooring that has never been walked on, or the look of a new construction home, a flipped house can be a way to provide all of those without the higher price tag associated with a new house.
Flipped houses are also move-in ready. If you love the neighborhood the home is in, but most of the houses are older and require some updating, buying a flipped house can be a great way to avoid the waiting, stress, and expense involved with a home renovation.
Another advantage of a flipped house is that the renovation costs are rolled into the price of the home, aka your mortgage payment. Rather than buying an older house and paying for the renovations out of pocket, a flipped house is already renovated and the price is already set for you.
Related: What to know about the seller’s disclosure – Can you trust anyone?
Risks of Buying a Flipped House
There are some risks associated with buying a flipped house. In some cases, real estate investors are willing to cut corners or use the cheapest materials to maximize profits. This might result in living in a home that will need additional renovation and repair within a short period of time. It is absolutely essential when buying a flipped house to look out for signs that only cosmetic renovations have been done while leaving major problems right below the surface.
We have a few tips to help you avoid these risks.
Make a Checklist
Before looking at a house, make a checklist of things you want to take a look at. You may not know for sure whether a house a flipped house, but this checklist will apply to any home you are considering. Your checklist should include looking at the doors, windows, and door knobs. Pay attention to the quality of materials used. Make a list of everything in the house that is new, and take note of whether the materials are high quality or not.
There are some common shortcuts that less reputable house flippers will take, so watch out for them. These shortcuts include painting over things that should have been replaced, choosing the cheapest doors and windows, and neglecting to update appliances and major systems like plumbing, electrical, and HVAC.
More: What are the functions of an escrow?
Ask About the Contractor
If you are seriously considering making an offer on the home, ask for information about the contractors and permits associated with any work done. If the seller is not willing or able to provide the information, you may want to reconsider making an offer or be prepared for potential problems down the road.
Work with a Home Inspector
One of the best ways to make an informed decision about a flipped house is to work with a great home inspector. Having a professional give the property a thorough inspection will give you an idea of what work has been done and how well it was done. You will also find out if there are any problems with the home that will likely need to be addressed quickly.
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