buying a flipped house?

nital · August 2011

one of the houses we're interested in is a flip. is there anything we should be wary of in flips? it seems very common around here to buy a foreclosed house for cheap at auction, do a few cosmetic things, then turn around and put it back on the market for 20-40% more. obviously we'd still be getting an inspection.

tia

leolyns · August 2011

We bought a flipped house and we had to get two appraisals (I think this was because we were doing an FHA loan and the house was bought and redone within 90 days). The inspection was okay and the investors who bought this did quite a bit of work including fixing the plumbing. But they were pretty cheap with some of the upgrading (i.e., they replaced the vanity/sinks in the bathrooms, redid the tubs but the linoleum from 1983 is still here) so when we have the money set aside we'll do other upgrades ourselves.

Catlawdy_____ · August 2011

As PP mentioned, make sure your lender doesn't have issues with the length of time the home was owned by the seller, sometimes that's an issue.

We've purchased and rehabbed two foreclosures (the second one is still in progress). The people we hire to do work on it tend to ask if it's a flip or a long term home b/c it impacts the materials they recommend using, even down to whether they recommend the more expensive exterior paint or the cheap stuff. Someone flipping a house has an incentive to get stuff done as cheaply as possible and to make the house look attractive, they don't really have a motivation to spend extra. I doubt I'd buy a flip.

Pamela05 · August 2011

Ditto pp. Really look at whether they used the cheapest materials / fixtures possible. Ask what work was done and consider special inspections for plumbing / electrical. The house we're selling has 3 flips on the street and they use the exact same crappy stuff in the 3500 sq ft house as the 1000.

Simpsongal1 · August 2011

Just beware as others have warned and get a fantastic home inspection.

I saw an HGTV special when they went back to home purchasers and asked how things had been since buying the home. One couple who bought a flipped home said it was a nightmare. Shoddy work and materials made for expensive improvements.

One example - the lovely moldings around doors turned out to be some sort of cardboard composite, that bubbled when it was painted. Indifferent

pinkeggs · August 2011

I recommend getting two inspections; the usual one and a city code one. We bought a flipped house in 2008 and it was a nightmare. I don't know how it passed the inspection because about six weeks after we moved in, we found out that most of the electrical and plumbing had to be redone and nothing was up to code. The shortcuts they took were mindblowing. (Ex. our jetted bathtub was plugged in with an extension cord, many outlets were not grounded, the master closet shelving was not put into a stud and the entire thing came crashing down one morning, and my favorite, they left a tree branch stuck in the main plumbing pipe and when we tried to do laundry in the mudroom, the entire kitchen sink filled up with water.)

The seller's agent and our agent ended up splitting the bill for the repairs and I believe it came to close to $10K.

I doubt we would ever buy a flip again, but if we did, I would definitely pay extra for additional inspections AND get the public record on permits obtained for the work (we found out that they never applied for nor obtained any permits to do the plumbing, electrical, or add-on that they did and therefore did not have code inspections.)

Good luck!

strangisj · August 2011

I'm an agent and when my clients buy a flipped house, I always call the city to make sure the proper permits were pulled, electrical inspections were done, etc.. You'd be amazed how many bad do it your selfers are out there trying to flip and make a buck. And a lot of times permits aren't pulled. Have your agent too pull the old MLS listing from when the flippers bought it. You can kind of see what was wrong before and what it is like now. I know too that many cities require a Truth in Housing report (various cities in the Minneapolis area require them), where the city inspector comes out and flags any hazardous problems in the home. Check to see if your city requires it and check to see if you can get your hands on the past report! As long as you do your home work, you should be fine!

emisi · August 2011

Sometimes there's weird little things wrong, too... ours, they reversed the hot and cold on most of the faucets in the house. Definitely get a good inspector - ours realized that the siding had been STAPLED to the FOAM backing, meaning it wasn't attached to the body of the house and would come off in a stiff breeze. We made the sellers pay to replace it, but they still walked away with a hefty profit, so they were happy enough to get it off their hands.

grahamsm3 · August 2011

We bought a flip, but it was a 110 year old house - so there was not much they could do poorly to the basic systems that wouldn't be obvious.

We knew all the issues before we bought and were prepared.

jooliagoolia2 · August 2011

I don't think I'd ever buy another flipped house. After a 10K bathroom repair where we found ungrounded wires, live wires left open in the insulation, and lots of shortcuts (like crappy tiling jobs) and shoddy workmanship. All this wasn't apparent to our inspector. But we did have the sewer scoped and that turned out to be a major problem, which the sellers fixed.

Everything was half-assed. I'd get at least two inspections in the future for anything resembling a fipped house and spend more money on any extra inspections (sewer, plumbing, electrical, etc). UGH. I get angry just thinking about it. Lesson learned--we were first time homebuyers and needed to buy fast.

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