Flipped homes are becoming popular again, and there’s plenty of reasons to buy them. Everything is rehabbed, from the floors to the walls to the landscaping. It seems like flip homes are prepared for you to move right in.
In reality, some home flippers are just starting out. They might not be filing all the building permits they need to do, and some might have done a shoddy job on things that are behind the walls and floors.
So, to be safe – both literally and financially – there are some questions you need to get answered before signing any contracts or paying any money.
“The advantages of buying a flipped house is that it’s upgraded and hopefully it was a whole house renovation with the plumbing and electrical done,” says K. Natasha Ellestad, realtor at RE/MAX Advantage Plus in Spring Park, Minn.
She and her husband, a mortgage broker, have flipped three properties.
“It’s very important to have a city inspection. It’s free is most cities,” she says. “The cosmetic things may look good. But there are more important things beneath those cosmetic changes. If the flippers moved anything around like the furnace, you need to know about it.”
Below are other questions you might want to ask before committing to a flipped home.
Do you get a home warranty with the house?
Even though the flipped house usually has new appliances, does it have a new water heater, furnace and air conditioner?
With a home warranty – which usually is written for a year at a time – you can potentially save thousands if something breaks early on. You can then renew the warranty by paying for it yourself the second year you live in the home.
What exactly was replaced and changed?
The gleaming new hardwood floors are beautiful. But other things look old and worn out. Have the real estate agent get a list of the things that were repaired recently or replaced.
Pay attention to crown molding that doesn’t match at the corners or gaps in bathroom tiles. If the flippers didn’t do the small things correctly, red flags should be waving telling you that they might have skimped on the larger issues that could cost you down the road.
What does the basement look, smell and feel like?
If there is a basement in the house, Ellestad says to really take a good look at everything. Does it smell moist? Sometimes, flippers cover up mold and moisture with paint just before potential buyers get there. Is there a dip in the basement floor because of water protrusion? Make sure you have a radon test done, too.
How old are the windows and doors?
Walk around and check the windows and doors. Did someone just paint over windows that could be lead-based? Do the windows even open? Do all the doors actually close correctly or even lock?
Was there recent storm damage?
To see if the former owners or flippers took out any claims from storms, call your own insurance company and give them the address. This knowledge helps you to know if you need to repair something.
Also, new buyers can’t put a claim on storm damage within a certain time frame. So, you might use this information to hold the flippers accountable to fix the roof, etc.
Did the flippers pull the right permits?
If you can find a paper trail of permits, you also might find that the remodel of the home will be up to safety codes and standards. “Have an inspector check the property to make sure the wiring is up to code, and all the other changes made were done properly and safely,” Ellestad warns.
What do the disclosures say?
Some states are full disclosure states – meaning the seller must disclose any property defects and any other information that could have an effect on the home buyer’s decision.
Also, make sure your real estate agent gets you a history of all the sales on this property. How often was it sold? Who owned it before the flippers? How long had they owned it? Why did they move? Then look at the disclosures for any red flags.
Are there any liens against the house?
If the flipper hasn’t paid all of the contractors, there could be a lien against the property. Ask your realtor to find out. You don’t want to to be involved if the owner owes someone else money.
“The new kitchen cabinets and the beautiful new bathroom of a flipped house aren’t as important as knowing what else was done or not done,” Ellestad says.