Charles Stallions says an educated buyer is an informed buyer. As an investor, there are many ways to prevent the story below from happening to you. Call or text me at 850-476-4494 with "buyer mistake" to receive " the top 5 report" on flips and the corner cuts to look for.
When my husband and I first walked through the door of our current home, I thought, "This will do."
We had spent six months looking at homes, and I was tired. Our second child had recently been born—in fact, we canceled the first meeting with our real estate agent because I was in the hospital giving birth—so we were eager, maybe even desperate, to find a place to settle down with our growing family of four.
The house in Allentown, PA, which we bought for $175,000, was move-in ready. A recent renovation included a remodeled kitchen, updated appliances, new exterior siding, and a refinished roof.
On the face of it, all the hard work had already been done for us. We didn't know that the house had been flipped—and it didn't take long to discover that many corners had been cut.
Early signs of a cheap flip
We had barely moved in, with cardboard boxes everywhere, when we noticed small things. A light in the living room didn't work, and the dead electrical outlets didn't connect to any of the switches.
Then, more annoying issues started to crop up.
The bathroom lights started flickering whenever the hall light was turned on. A drain pipe in our laundry room overflowed, flooding our basement.
Then, the big problems started to arise.
We settled on our house in the fall, so we didn't use the air conditioner until the following summer. On the first hot day of the year, we learned that our HVAC system did nothing to cool the second floor of our house.
An electrician said the lights flickering was a byproduct of incorrectly installed fuses. A plumber said our washer kept backing up because it had been added to the same line as the kitchen, which was enough to cause frequent clogs.
And the trouble with the HVAC? According to an HVAC tech, the person who installed our system had used the wrong-sized unit for our home and had installed attic ductwork in the basement. This combination of errors meant the unit could not push cold air to the second floor.
The most basic fix would cost something in the five-digit range.
The financial toll of buying a poorly flipped house
We're nearly seven years into owning our home, and not a year goes by that we don't have to address something that was mismanaged during the flip.
We've replaced an incorrectly installed water heater that had become corroded due to a leak, our entire gutter system, which had been hung at the wrong angle, causing it to bend and warp under the weight of snow and rain, various components of our HVAC system (including the compressor twice), and so much more.
We're more than $10,000 into these fixes with another $10,000 ahead of us.
Hindsight is 20/20, and looking back, there were some obvious signs that things weren't done correctly. For instance, our "new Bilco door" to the basement was no more than a sheet of unsealed plywood with a handle.
We should have been wary the moment we looked at the listing.
Homes might not advertise that they are a flip, but a red flag is when the purchase history shows the house was put back on the market a few months after it was last purchased.
While not all flipped properties are poor quality, a bad flip might often sit on the market longer than what seems typical for the area.
"The first red flag of a bad flip, before I even see the house in person, is the days on market part of the MLS listing," explains Jameson Tyler Drew, developer and president of Anubis Properties in Whittier, CA. "If the house doesn't look like a total wreck, is decently priced, but has been on the market for 90-plus days, that's a red flag that something in or around the house is wrong."
Another dead giveaway was that while the house looked pristine—with new flooring, a fresh coat of paint, and a recently renovated kitchen—other areas often ignored by buyers had a more patched-up appearance.
"Interior cracks can be hidden with some clever use of drywall and paint," Drew says. "Exterior cracks not so much. Foundation issues are sometimes extremely apparent from the outside, like disintegrating concrete, sagging and peeling stucco, or diagonal cracks in the exterior walls."
Drew says that fixing these issues is often expensive and time-consuming, which is why many flippers leave them unaddressed.
Another place to check in a flip is the bathroom, he adds.
"When visiting the inside of a flipped home, I usually go straight to the bathroom and look at the floor," he says. "If the tile work is starting to crack or there are gaps between the floor and walls, I usually prepare my clients for the worst."
How to check a flipped house for issues before you buy
Our home inspector missed a lot when inspecting our home, but the real issue might be that we didn't bring in the right professional for the job.
"There are qualified home inspectors who offer what is called a 'Construction Defect Inspection,'" explains Bradley Wilson, a licensed real estate salesperson and educator at Finger Lakes Sotheby's in Skaneateles, NY. "This is a much more in-depth inspection, which costs two to three times that of a typical inspection, but is well worth the money."
According to Wilson, this inspection will address the “nuts and bolts” of the construction and offer insight into whether you should hire another specialized professional, such as an engineer, plumber, or electrician. This type of inspection would have been hugely helpful in our situation since the inspector would have referred us to an HVAC pro for our air conditioner.
If you don't want to (or can't afford to) hire another pro to give your prospective home a once-over before you sign on the dotted line, you can always do some of the legwork yourself, or ask your real estate agent for help.
If you know the names of any of the companies that worked on the house you're looking at, whether the construction company or the corporation that purchased the property, you can look them up online and check their reviews on the Better Business Bureau website.
Another smart option is to contact the local municipality to ask for the building permits for the property address.
"If the square footage or property description for the city doesn't match what's in the MLS listing, you might want to move on," Drew says.
Why Choose Charles Stallions?
Since 1995, with Charles's experience and certifications like Certified Residential Specialist (CRS), Certified Buyer Expert (CBR), and Senior Real Estate Expert (SREE), Charles Stallions has helped thousands of families achieve their real estate dreams. Whether you are buying your first home or upgrading to your dream property, Charles is here to guide you.
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Whether you’re buying, selling, or exploring the local market, let Charles Stallions guide you every step of the way. Call or text today at 850-476-4494 for expert advice you can trust. We “R” The Realtors for That!
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