Buyer Beware! Flipped Home Advice

What local house-flippers don’t want buyers to know… 

…and the critical questions to ask before buying a house remodeled by a real estate investor. 

Buying a home that was extensively remodeled by a house-flipper can be risky. 

Today, I’m sharing the questions buyers SHOULD ask (but rarely do) to avoid years of regret and financial losses. 

I’ve been seeing more and more investor-remodeled homes selling for shockingly high prices around town. 

This makes me very worried for local home buyers, and here’s why… 

An investor’s sole objective is to make as much money as quickly as possible. 

Low quality contractors tend to be the ones doing the work and they’re probably cutting corners for the sake of speed. 

Also, the materials used might look great to the untrained eye, but they tend to be flimsy and cheap. 

Most home buyers simply don’t know the difference, and why should they? 

They’re not experts on homes or construction quality. 

Because a house looks beautiful in the online photos, many buyers assume the high asking price is a reflection of quality. 

That assumption is miles away from the truth, more often than not. 

Don’t get me wrong. 

Some local investors have earned a reputation for building high quality homes work with skilled contractors. 

But, as house prices continue to climb year after year, fly-by-night investors are jumping into the market. 

This is where things get concerning. 

The last thing I’d want for a homebuyer is to buy a house that looks beautiful on the outside… 

…but is actually a ticking time bomb of construction defects and shoddy workmanship hiding beneath the surface. 

Home buyers are at a real disadvantage here.  

The sad truth is most agents don’t know the right questions to ask to really dig deep on the quality of a remodel… 

And even if they do, there’s no incentive for them to go the extra mile and look for hidden problems when their client has already fallen in love with the home. 

Regardless of financial incentives, I believe in treating clients the way I would treat my own family, so here are the steps I advise my buyers take when vetting a flipped house:  

1) Ask the seller to provide you with the name and license number for the general contractor. 

Have an attorney run a search for closed or pending litigation against that general contractor for construction defects. 

Also, check to see how long the contractor has been licensed. 

Ideally, they’ve been active for many years with little to no litigation. 

If not, you can consider that red flag #1. 

2) Ask for the names and license numbers of all the major subcontractors who worked on the home. 

These would include the contractors for electrical, plumbing, roofing, concrete, dry wall, etc. 

If the seller tells you the general contractor is the one who did all the work normally done by specialty subcontractors, you can consider that red flag #2. 

Of course you’ll do a general inspection, but this tells you very little about the underlying quality of the home’s build. 

The inspector can’t look inside of the walls. 

3) I recommend hiring an experienced general contractor as a consultant to review both the architectural and structural design plans. 

Also, have them on-site to investigate the property at the same time as the general inspector.  

This’ll give you a much better picture of the build quality. 

If everything to this point seems satisfactory, there’s one more step I highly advise…and this is the most important of all. 

4) Require the seller to provide the name of the insurance company and the insurance policy number for the general contractor and every subcontractor. 

Here’s why that’s so important: 

If poor workmanship causes damage to the property, in California,  the contractor’s insurance carrier is liable for the cost of repairs for ten years. 

If years down the line your roof starts to leak and you don’t know who the roofer was or what insurance company they had, then you’ll be at a huge disadvantage. 

And that’s just one of a hundred things that could go wrong due to poor construction quality. 

If you’d like further guidance on how to protect yourself when purchasing a home, whether a flip or otherwise, please feel free to reach out. 

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