Let me begin by stating that flipping is OK with me. If you have the vision and guts to participate in this practice, no worries. However for inexperienced buyers, it may prove costly if post-sale, they find they have gotten less or a lot less than they expected. So walking into a real estate transaction, suspecting that you are dealing with a flip can be important.
Vancouver’s bubble real estate market has single family dwellings in blue collar neighbourhoods selling for over one million dollars. The posh neighbourhoods have prices starting at two million dollars, if you get lucky, and up. Just take a look at www.realtor.ca and for neighbourhood, type in ‘Vancouver’. So the lure of fast, easy money by flipping is an irresistible attraction for many ‘investors’. Based on my experience, here are some red flags that I’ve identified for when a house may just be there for the flip without any attention paid to major repairs or servicing.
House was not lived in by the seller, nor has it had a tenant.
Minimal furniture, clothing or food in a supposedly occupied dwelling.
Recent paint job on the exterior with lots of overspray. However no attention paid to roofing, flashing or building envelope issues.
Construction debris in garage, crawlspace and scattered throughout the yard, including tools.
Mechanical systems in a sorry state. Air conditioning system turned off and condition unknown. Home elevator not working. In-floor heating suspect. Water leaks in mechanical room not addressed. Hot tub never used.
New security system installed but not all old sensors connected.
Primary doors and windows stiff to operate, as if not used in a long time.
Landscaping not addressed. Potted plants dead.
New systems installed, while not removing the old. For example new exterior low voltage accent lighting working but the old system abandoned in place.
Disclosure statement with too many items marked ‘unknown’.
A professional home inspection will reveal most of the above issues and question the half-hearted attempt, raising more questions and concerns that may scuttle the deal if financing is required by the buyers.
In consideration that many such properties are being purchased for ‘lot value’, a mediocre attempt at a facelift is really not that important at all. Why bother? My advice for the seller… keep the money in your wallet, take the family out for nice vacation instead and toast your good fortune for timing the market just right!