Get A Home Inspection Especially When Buying A Flip
In an earlier video (6 Rookie Home Buying Mistakes) I mentioned that skipping a home inspection was a crucial mistake in the buying process.
Today I want to jump in a little deeper on the topic of home inspections and their importance when you make the big purchase.
I especially want to stress how crucial this is when buying a flipped house, which I’ll talk about at the end of the video.
In California, we have some pretty good mandated requirements for sellers to disclose material facts when they’re selling a home. But not all states have the same requirements and sellers everywhere seem to have their own interpretation of exactly what really has to be disclosed to the buyer.
The Transfer Disclosure Statement, completed by the seller, is supposed to list any potential areas that have been repaired or may need repair,
but it’s best to hire a home inspector to review these items and write a full report.
Now, here’s a TIP OFF to spot problems:
Watch for disclosure statements with hardly any items noted.
Every house has likely has a water leak, walls painted or a minor remodel. Even if it’s just a simple bathroom drain or tub overflow, it needs to be noted.
A seller who claims nothing has ever happened to their home is just a red flag for the buyer to look deeper.
Don’t get caught up in the emotions of a new home to the point that you are willing to look deeper into potential problem areas.
When you hire a HOME INSPECTOR, they inspect all of the electrical, plumbing and mechanical systems of the property, structural items like doors, windows and foundation, a review of safety items and an overview of the general condition of the property.
Every inspection company has their own level of expertise and thoroughness so shop around when making a selection.
Ask to see a sample report so that you know what to expect. Other inspections that you might want to consider are roof, sewer, chimney, swimming pool, solar, lawn irrigation, home security equipment, and appliances.
You may also need a separate inspection for radon, lead paint, or mold as well as a land survey if you think the property boundaries are questionable.
Review the inspector’s report with your realtor and make a request to the seller to repair or replace damaged or defective items.
Just remember that homes are typically sold AS-IS and the seller is not required to make any repairs. The price of the home may already reflect the conditions stated in the TDS or you could negotiate for some of the repairs or a different price.
Alternatively, you can cancel your offer and move on if you can’t come to an agreement.
Now, let's talk about flipped houses.
The difficulty when buying a flipped home increases by several levels of magnitude because the owner / flipper may not be directly involved in the day-to-day operation of the labor and may not have first hand knowledge of problems in the house.
However they are not absolved from disclosing certain items.
Flipped houses may have defects that are buried behind new remodelling.
New kitchen cabinets, tiled bathroom walls and shiny floors may actually cover shoddy workmanship or potentially dangerous situations.
You’ll have to rely on your inspections to find as many of these as possible before they become disasters down the road, long after the seller has moved on.
Also check with the local building department to see if any permits were issued for the remodel.
Even items like changing a dishwasher or water heater may require a permit. So if you don’t see anything on file, be ready to move on.
If you do buy a flipped home and feel the seller defrauded you with false claims, you may have cause to take legal action.
Sellers can be sued for hiding problems or defects. But even if you’re successful in court, you may have a difficult time collecting any money.