Many buyers love remodeled and renovated homes as they offer a turnkey solution. This appeal has made flipping homes a very lucrative business.
And if you like many Americans watch popular TV shows like Property Brothers, Flip or Flop and Fixer Upper, you might believe that buying a remodeled home is a great idea. These shows always have happy endings. The process looks fun and easy, and the houses turn out beautiful. However, it is rarely this easy when buying a real-life remodeled home.
There are plenty of flipped houses that turn out to have significant problems. Contractors who do remodels sometimes rush through the job or cut corners to make a bigger profit. This can lead to sub-par work. While the house might look beautiful initially, problems could develop down the line that make purchasing such a home quite costly. So before you decide to go this route you may want to understand the potential pitfalls such a property poses.
Work That Isn’t Up To Code
If you live in a full-disclosure state like Texas this wouldn’t concern you as sellers are required to disclose to buyers everything that they know about the house. This should make it easy to get a list of the work that the flipper completed. Even if you don’t live in a state that requires full disclosure, still ask for a list of work. After you have a list of the upgrades, check for permits. Most larger remodeling projects need a permit. Avoid a remodeled home that has had upgrades that don’t have the necessary permits as there’s a chance it may not be up to code. Aside from being a safety risk, work that isn’t permitted can make it harder to get financing or insurance on a home.
Before making an offer on a rehabbed home find out who the owners contracted to complete the job. Then do research on the person or company. Are they known for doing high-quality work? Flippers that have solid reputations want happy customers. Most want to avoid legal issues which could ruin their reputation and damage their business. So, they’ll ensure the work is up to standard.
Avoid flippers or contractors that aren’t well known. Many move on to the next town after the job is over and don’t care if they leave behind unhappy customers.
Beautiful hardwood floors, granite countertops and shiny new kitchen appliances might make a house look like it was just built. However, most flipped houses hide a dark history. Many remodeled homes were poorly maintained before being flipped. Some contractors cover up these problems rather than do the extensive work needed. Therefore, it pays to have the home inspected. A good home inspector will be more likely to spot things that an average homeowner might miss.
When you buy a remodelled home it’s important that you do your due diligence to avoid being duped. Some unscrupulous characters are involved in the home flipping business and make it difficult to find ones that care about the quality of work they produce.
You always want to maintain a healthy sense of skepticism and rely on a trusted real estate professional when you enter the market. You should also request a list of previous remodeling jobs as this is the only way to avoid being taken advantage of.