The home buying experience can be an overwhelming experience that can be exhilarating, fun, stressful and exhausting. The process of securing a mortgage, successfully bidding on a home and completing the transaction can be lengthy, complex and involve seemingly endless professionals. Those professionals may include a buyer’s agent, a loan officer, a home inspector, title […]
What to know before buying a flipped home
A flipped home is a house bought by a real estate investor with the intent to increase its value through updates before selling it for a higher price. If the home you’re intent on buying has been flipped, there are some things you should be aware of before going through with the sale.
Here’s what you need to know before buying a flipped home:
Understand the pros and cons of buying a flipped home
Like with all home purchases, there are pros and cons to buying a flipped home.
- Advantages – You’re more likely to have an updated house, both in style and things like appliances and systems. Flipped homes are also often move-in ready and you won’t have to worry about painting and other repairs. .
- Things to look out for – The investor’s goal is to make a profit. Ensure the quality of the renovations are up to code and not covering up any underlying issues. Check that the proper housing permits were submitted and approved. As legal homeowners you will be responsible after the sale goes through. Hire a good, reputable inspector who will deep dive into the home’s electrical, plumbing, and roofing to ensure everything works.
Like with all home purchases, look at them with a critical eye to avoid expensive fixes later.
Research the home’s history
You may not know whether the home you’re buying is flipped or not. Researching the home’s history can tell you who previously owned the house and when. If an owner is an LLC or corporation, that’s a good indication that the home has been flipped, but that may not always be the case.
Know what to look out for when inspecting the home
When touring a flipped home, view it in with a critical eye to avoid being taken in by trendy designs. Make a checklist of things to inspect and research:
- Do all the cabinets, doors, and windows open correctly?
- Have all improvements and additions to the home been made with the correct permits?
- Has the contractor who worked on the house been verified?
- Does it seem like improvements were rushed?
After the inspection, you can request for issues to be fixed by the seller or use them to lower your offer so you can do it yourself. Still, it’s up to you whether the problems are a showstopper.
Remember that no house is perfect! Whether brand new or updated, there may always be something that needs to be fixed. When shopping for a home, don’t be shy about asking your agent questions about the property. The seller may also be willing to work with you to negotiate the sale price or concessions.