The Market is Hot and Investors are Flipping Houses
Flipped houses can be great IF the flippers hired licensed contractors to do the structural, electrical, plumbing and the major changes in a home. If you're checking out a flipped property, ask to see the permits for work completed. If the workers didn't pull the proper permits, consider turning around and walking away.
Steve Carpenter-Israel, Broker & Owner of Buyer's Edge was quoted in a recent CNBC interview about a flipped house that was a flop. Steve said, " It's literally putting lipstick on a pig. "They're just doing cosmetic stuff and actually covering up problems, and that's scary because it's very difficult to figure it out."
Steve Carpenter-Israel, Marshall Henderson & Stephen Mercer are members of the National Association of Exclusive Buyer Agents (naeba.org)
Last month, NAEBA warned about the dangers of buying a flipped house.
At a recent home inspection of a flipped property in Baltimore, our inspector turned on all the water to check the pressure. I followed him into the living room as he continued with his inspection. As he turned an infrared camera to the ceiling, he yelled, "Oh (expletive)" and I looked up to see water stains forming along the crown molding of the living room ceiling!
Buyer Beware!
- If you are buying a flipped property, ask if the flipper used licensed contractors to do the major work
- Work with an experienced real estate agent. Your buyer's agent will be looking for what is wrong with a house as much as what is right with a house.
- Hire an excellent home inspector. An inspector will evaluate electrical, plumbing and the structural elements of a home. If there are major issues, a good inspector will find them.
- If you have a chance to talk to the neighbors, do so! One day I was checking out the backyard of a home for sale. I chatted with a neighbor who told me how the previous owner (the owner who sold the house to a flipper) struggled for years with a wet basement. Once inside the home, I saw the flippers had installed not one but two sumps pumps. They had also installed an interior french drain . My client moved ahead with the home inspection and the inspector determined the work was done well and the basement would stay dry.
For more information on flips & flops
CNBC-Why your flipped house may be a flop
5 Mistakes that make house flipping a flop
4 Keys to Buying a Flipped House
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