5 Important Steps to Take When Buying a Flipped Home

    Buying a home can feel risky. Buying a newly flipped home can feel even riskier. That is why it’s so important to take some extra steps before you buy that shiny new flipped home.

    “Flippers” will buy a property that needs repair, fix it up, and then turn around and sell it for a profit. These houses can be extremely attractive to buyers who are looking to buy in a certain neighborhood but don’t necessarily want to make the repairs needed to make it move-in ready.

    Identifying a flip home can be fairly easy. First, you’ll notice that the house was purchased and then put up for sale around six months later at a higher price point. Then, you will notice the upgrades usually throughout the entire home, but sometimes just in the main areas such as the kitchen and bathrooms.

    Once you identify that the property you’re interested in is a flip, take these next steps, based on an article on Bankrate.com:

    • Step 1

      Try to identify who flipped the house. Once you do that, try to track down earlier buyers so that you can ask if they discovered hidden problems after moving in. Even if you can’t locate other owners, ask to see other properties that they have flipped. This can help you make a better offer by recognizing how long their houses typically stay on the market, what they sell for, and what kind of condition they are in.

      Regardless, purchasers should ask for a history of properties the developer has completed. These examples will also show a buyer how long a flipper’s properties remain on market, average sale price, as well as other considerations for a potential offer.

    • Step 2

      Ask the owner for a written report detailing what has been done on the property and ask them to sign it, Patricia Szot of Keller Williams Realty Lake Cities in Garland, Texas told Bankrate.com. You can get a good idea by looking around as to what kind of work has been done, but if you have a list of items you can pay special attention to those areas.

    • Step 3

      The name of the game here is research. So your next step is to find out who the contractors, electricians, and other tradespersons were who worked on the renovation. Look into their track record as well. While a home inspector is going to check the safety and code, there are things you can’t see behind the walls so it’s a good idea to know the quality of work that went in.

      You can get a good idea yourself by doing a quick check under the sink and in the electrical panel according to Mike Holmes, contractor and author of “The Holmes Inspection: The Essential Guide for Every Homeowner, Buyer and Seller,” (Eldorrado.com). Holmes suggested to Eldorrado.com to take a look at the plumbing in the kitchen and bathrooms as well as the electrical panel. The plumbing should be new and the wiring in the electrical panel should be “clipped and tidy”.

    • Step 4

      Speaking of home inspections, hire a professional home inspector. It’s always a good idea to do this but it is especially necessary with a flipped home. They will be able to point out things you may not notice while you’re busy looking at the amazing new tile backsplash.

    • Step 5

      With any house we always try to mitigate risk as much as possible. So it is a good idea to negotiate a home warranty as a part of your contract, according to an article on WashingtonPost.com. They may look like new homes, but flips don’t have the same two-year warranty that a new construction may come with. You can also take an extra step and keep all of your warranties for things installed during the flip, if available: HVAC, major appliances, roof, etc.

    Whether you’re looking to buy or sell, it’s always a good idea to speak to a real estate agent first. Contact us at MD Home Team for your real estate questions today.

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    Josh Mente

    Real Estate Leader Josh Mente, is a founding member and owner of The MD Home Team of Keller Williams Excellence, and is responsible for business administration and marketing for the firm. Josh’s career path began in 1998 as a loan officer for Eastern Savings Bank, where he managed national accounts. He later joined Option One Mortgage originating more than 500 transactions per year valued at $100M+ in sales. In 2006, Mente shifted his expertise to real estate sales, gained his license and focused on buy/fix/sell transactions. Josh is a member of Elite Real Estate Network (ERN), the 2009 Rookie of the Year for Long and Foster corporate, and in 2012 ranked 206 and 2013 ranked 234 in Real Trends of the Wall Street Journal, ranking in the top 250 agents nationwide for all brokerages. From any early age, Josh was introverted and worked hard to overcome a fears of sales - a business that doesn't lend itself well to introverted people. When challenged by a manager that he didn’t have what it took for a specific job, Josh pushed forward and won approval in his new position. That was a pivotal moment that set the pace for his success in real estate sales. Having earned an AA degree from Montgomery College in business administration in 1995 and a Bachelors of Arts Degree from Towson University in Mass Communications 1997, Josh married his college sweetheart Melinda and they now have three wonderful daughters that provide the opportunity to watch them grow up and experience things for the first time. A committed sports fanatic, Josh spends time on the golf course, and follows the Ravens and Orioles as a season ticket holder. He is a part owner of two restaurants in Manhattan, enjoys music and time away with the family at their beach house in Rehoboth, DE. He hopes to find time for his hobbies that include building furniture, playing guitar, learning Spanish and flying planes.

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