Buying a flipped house? Here are some questions to ask!
This post comes from an article on Realtor.com that discusses questions on flipped houses.
What is a flipped house? A house that has been flipped is one that someone bought, did either a lot or a little work, and then is “flipping” it by selling it fairly quickly to a new owner.
There are things that you, the buyer should know if you are considering buying a flipped home.
First, ask “Who is the seller of the home?” Is it an LLC? Is it a newer LLC? Or is it an individual? The reason to ask this question is that an LLC is a Limited Liability Company. This means that the individual members of the LLC are protected from personal liability for debts and sometimes court judgements. What does this mean for a homebuyer? If you were to buy the home and issues arose, and the LLC were dissolved or assets of the LLC gone, it is possible that you may not have recourse or ability to collect on any court judgements in your favor since personal assets of the LLC members were protected.
Second, “What renovations and work did the seller do?” Was plumbing done? Electrical? What on each? How old is the heating and air? How old is the roof? If it is new, can they provide the roof warranty to the buyer? How about appliances? Do they have receipts for the appliances with any warranties? Were walls moved? Basically, was this a “facelift” or a lot more? This can help you understand just how much was done, and what to ask in #3.
Third – “Do you have the permits to show? Are they all completed and closed out with signed off inspections from the County/City? Can you provide me with all? Check with the County/City where the home is located to make sure what you are told is correct and all work was properly permitted.
Four – “Who was the previous owner?” If it were a long time owner, they may know when older items were replaced, and by whom. If it has changed hands a few times recently, why?
Five – “How long was the house unoccupied?” If the home were vacant for a long time, there could be hidden issues potentially not found by the flipper.
It is a good idea to have a licensed home inspector do a full inspection of the house inside and outside. Whether it is a regular home or a flip, whether the home looks to be brand new or not, a professional, licensed home inspector can help to look for things you may not be able to see when you look at the home. I do want to note that inspectors cannot see through walls and floors or behind walls, so they cannot necessarily find everything that could potentially be wrong with a house. That being said, a professional home inspection is good to teach you about the house and could possibly find issues that could potentially pose a significant problem.
If you want to buy a home in Baltimore or the surrounding communities, please contact me. I would be happy to help!