Should you buy a flipped house?
If you ever watch home improvement shows, you've definitely seen "flipped" houses. From HGTV's "Flip or Flop" to A&E's "Flip This House," there are many shows that have featured the ups and downs of the tasks involved in restoring homes. The trials and travails can make for enjoyable reality show entertainment.
But have you ever thought about actually buying a home that's been flipped?
Home flipping - and buying - is as popular as ever. Last year, for example, nearly 208,000 single-family houses and condominiums were flipped, the largest amount in more than a decade, according to ATTOM Data Solutions. Sales for these residences are booming nationwide - particularly in Pennsylvania, Ohio, Baltimore, Tennessee, Nevada, Alabama and Arizona.
ATTOM Data Solutions Senior Vice President Daren Blomquist said there's been a surge in home flipping, especially in the last three years, as lenders are more willing to provide the appropriate financing for those doing the renovations and buyers take advantage of the newly installed furnishings and accouterments.
The question is: Should you? Here are a few tips that can help you decide if it's the right move for you:
Do your research on flipped houses for sale
Just as every person has a story, every house has a history, especially properties that require fixing up. As noted by the Washington Post, the longer a house has been around, the more owners have likely lived within its confines.
Talk with your real estate agent about where you can go to obtain details about the flipped home's background. You'll be able to figure out key aspects about the house that can provide more context about how extensive upgrades have been over the years and the makeup of its foundation.
For instance, colonial homes were often built on fieldstone, which may be more vulnerable to rodent infestation or crumbling.
Know who completed the home upgrades
No two properties are built the same - nor are the people that did the renovating. If a flipped home experienced prior renovations, those can affect the nature of the latest ones.
When a flipped property is up for sale, check with your agent to see if he or she can find contact information about who completed the upgrades. This will help you get a sense of their expertise and whether all of the appropriate permits were signed and submitted.
Also, be aware that the point person for renovations may have hired a contractor to do them, which entails more research into the builder's qualifications and due diligence regarding the firm being licensed to operate within the state.
Ensure property has a certificate of occupancy
As its name suggests, a certificate of occupancy is a document that certifies the flipped property is safe to inhabit. These are made available after a property has gone through a series of inspections by licensed professionals. It's a series because they may involve more than one if the property has received more than one renovation.
As noted by Realtor.com, it's usually the seller's responsibility to ensure that the inspection has been done, but it's good idea to mention this to your agent so you have it for your records.
Other "to-do" items to check off your list include requesting an updated disclosure statement from whoever is selling the property and obtaining warranties from any interior or exterior installations.
Buying a flipped house may be best move you'll ever make, but it could be a mistake if you don't know what you're getting into. By doing your due diligence, you'll make the move that's right for your family.