Buying a flipped home – what should I know comes from a CNBC article about issues some buyers have had when buying flipped homes.
First, let’s start with, “what is a flipped home?”
A flipped home is a home that was bought most likely in a state of disrepair – whether it was a foreclosure, or just not taken care of – these homes needed some TLC – sometimes a little, sometimes a LOT, which then is redone in a fairly short amount a time and the house is then resold.
A “flipper” is someone (person or company) who buys the home in disrepair, updates the home, and sells it in its’ new state.
Where buyers can run into trouble is if the “flipper” just did cosmetic updates and the house needed mechanical and structural updates that weren’t done, but are now hidden behind the cosmetic updates.
How can a buyer protect themselves when interested in buying a flipped home?
First, the thing to know is that there are no guarantees. Even if a contractor pulled permits, it does not mean that there won’t be problems in the future.
That being said,
- In Maryland, ask for the MHIC # for the licensed contractor who did the work. If there was no licensed contractor, this is something that could be a red flag.
- Ask for the permits for the work that was done. In Baltimore City, you can look many of them up online. With this search, make sure all final inspections were completed by the city or county where the house is located. If the work were large enough in scale, make sure there was a certificate of occupancy issued.
- Ask for receipts for the work that was done, and any warranties for appliances or work completed.
- Have a professional home inspection by a licensed home inspector. Though this is a visual inspection, and the inspector cannot see behind walls, the inspector may be able to see and point out items that you may not have seen on your own. The inspector may know much more about electrical, structural, and mechanical parts of a house than many other people!
- Have a professional termite inspection. Again, a termite inspector cannot see behind walls, but they may find evidence of past damage or again see things that a normal person may not see or understand.
- Have a professional mold inspection. There are a few types of mold inspections, one includes testing the air and comparing it to a sample of outside or upstairs. Though not perfect, it may indicate if there are mold spores in the air, or potentially show a hidden mold problem that cannot be detected by the naked eye due to walls or other structures.
- Have any additional inspections recommended by your licensed home inspector. If your home inspector doesn’t know the answer to something but feels strongly about a concern and wants you to have that item inspected further, do so. BUT, make sure 1) that you have the right to do so and 2) you stay within your time frames in your contract.
Here are some other details in the CNBC article.
Many flipped homes are incredible for a new buyer. A buyer gets a redone home without having to go through the construction process! Like any home, though, buyers should be aware that they should do inspections and take precautions, and they should not assume that everything was done correctly – sometimes there are just errors, too!
To learn more about buying a home in Baltimore, please contact me. I would be pleased to be of assistance!