In many cases, buying a flipped house can be your best option for a sound investment.
Think about it: you’re buying an older house that has had all the necessary renovations and structural changes handled before you ever came along. The previous owner took care of the dirty work for you.
Sounds good, right?
But to be safe, you’ll need to do your due diligence.
Because there are some sellers, or “flippers”, out there who will be quick to cut corners or gloss over certain glaring issues with a property. Even well-intentioned flippers may be under pressure to save time and money and simply get a house off their hands as soon as possible.
With that in mind, keep reading to learn 6 ways to get the best possible deal when buying a flipped house.
Buying a Flipped House – The Smart Way
1. Research the Flipper
When you’re buying a flipped house, one of the most crucial steps is to investigate who you’re dealing with.
What business is the owner in? Are they experienced? Do they have a good reputation in the community? If they’re a contractor, does their work have positive reviews?
Here’s where it really comes in handy to have a real estate agent. Agents tend to know important background details on flippers in their areas, so ask yours for any information they have.
You can also look into the flipper’s history a bit to find other properties they’ve sold and contact the buyers. Ask them directly if they would recommend purchasing from the seller.
If the flipper has a strong reputation for providing buyers with full disclosures, documentation, and warranties, you probably don’t have anything to worry about. A good seller wants his buyers happy, after all.
2. Get an Inspection
After you’ve verified that you can trust the flipper, it’s still wise to hire an inspector. Or three.
Buyers often assume a newly renovated house is in like-new condition. But even the most experienced contractors can make mistakes or overlook serious problems that may come back to bite the buyer in the behind a few years down the road.
An inspector is your strongest protection against getting burned. They’ll check all the contractor’s work and find anything you might miss on your own.
Yes, any renovations performed on the house were likely signed off on by the city/town it’s in, but only for health and safety reasons. So, have thorough inspections performed if you want to ensure that your purchase is in perfect shape.
3. Consider Materials and Design
One of the biggest clues that a house was a hasty flip is an old exterior with a (cheap) brand new interior.
Sometimes, the owner might actually include a stipend for buyers to choose exactly what they want for flooring, wallpaper, or other cosmetic enhancements in the home. Sure, personalization is a great incentive for buying a flipped house, but it may be part of the seller’s strategy to get rid of the property quickly.
Unfortunately, these stipends may only guarantee inexpensive materials and shoddy workmanship. And an owner that selects low-grade materials to save costs on cosmetics may have done the same elsewhere.
So, when buying a flipped house, be sure the whole package is designed with the best materials and planning.
4. Pay Close Attention to Details
Many times, flippers will simply pay to have new appliances, marble countertops, and flattering lighting installed. But a quick facelift does nothing to address the real problems a flipped house might be hiding.
In other words, keep your eyes peeled for telltale signs like:
- Gaps in bathroom or kitchen tiling
- Sloped floors
- Poorly sealed windows
- Cracks in the foundation
- Gaps between countertops and walls
- Doors or cabinets that don’t close flush with their frames
- Crudely matched crown molding
- Poorly installed light switches and outlets
Any of these seemingly minor issues could be clues to other larger problems that can’t be seen with the naked eye. If the flipper wasn’t careful with the cosmetics, imagine what sort of handiwork went into electrical work, gas lines, plumbing, etc.
5. Figure Out If It’s Properly Permitted
Anything more complicated than new paint or wallpaper probably requires a permit. So, if there have been tons of renovations performed on the house, check for permits.
Look under the sinks in the kitchen and bathrooms. Make sure the plumbing is actually all new, and not tied together with older fixtures. Check the electrical panel for clipped and tidy wiring, and look for any of the details mentioned above.
After you’ve checked everything out that’s been changed, compare it all to the list of permits granted to the address. If there is more work done on the property than permits listed, that’s a red flag. In all likelihood, that work isn’t up to code – which can be a serious problem when it comes to getting insurance or finding proper financing for your purchase.
So, before you ever consider making an offer, be sure the property is completely up to code.
6. Don’t Be Hasty
If you’re buying a flipped house, you’re about to make a serious investment – whether you plan to live there or simply want to flip it yourself later.
Because of this, some of the best advice I can give you is to take a deep breath and take it one step at a time. Even with a newly built house where you don’t have to worry about any unforeseen issues, you should still have patience.
Make sure you know exactly what you’re buying. Know your budget and what you can afford. And most of all, keep a financial cushion for the unexpected. If you rush right in, you might end up with a vastly different house and overall situation than you thought you had.
Most of the homes on the market today are wonderfully updated and ready for move-in. Some, not so much.
So, if you want the perfect fit for your family, all you need to do is take the precautions mentioned here and be patient.
And after you close on your new home, you can rest assured that you’ve made a smart investment. But if you still aren’t confident about buying a flipped house, you should find a real estate agent with plenty of experience in the housing market.
Contact me today if you have any questions about flipped housing or any other concerns related to the real estate business – especially if you’re in the Austin, Killeen, or Ft. Hood area!