Be Cautious With Flipped Homes

Mike Capelle, Broker/OwnerMike Capelle, Broker/Owner

As a home buyer, you’re excited to get out there and find your dream home. Sometimes that enthusiasm can be short-lived if you’re coming across properties that aren’t up to par or are simply full of filth and damage. When all hope seems lost, you come across a beautifully upgraded home and are anxious to make an offer until you learn—it’s a flipped foreclosure. This fact is not necessarily a problem, but as a buyer, you should be cautious with flipped homes. You adore the house, but are now nervous about the history of the home. What should you do?

Flipping Risk

Many house flippers buy properties in a foreclosure sale, or acquire a home in default of a loan. And frankly, foreclosures can bring the ugly out in people. While some homeowners leave their home peacefully, others will trash it on their way out the door. Holes in the walls, broken windows, busted fixtures, and damage from water left running are just a few examples. Some flippers will do the right thing and repair and upgrade appropriately–according to building code with licensed contractors, while others will simply cover up the damage with cosmetic fixes.

What You Should Know

When investors flip a house, their goal is to get all work done and sell it as quickly as possible to make a profit. While some flippers do an excellent job in fixing the properties, others do shoddy work and only invest in cosmetic fixes, attempting to hide deep-rooted issues. Buyers should always perform investigations on a potential new home, but these are especially critical for flipped houses. There are many horror stories of buyers purchasing a lovely home, only to later find there are serious problems lurking underneath the cosmetic façade.
The seller is required by law to disclose facts material to the value of a home, including recent repairs or remodeling work–even a flipper who hasn’t lived there, but it is always wise—and your right—to perform your own inspections and ask the seller questions. It is especially important for you to have professional inspections done on a home that little is known about.

  • What was the condition of the property when obtained in foreclosure?
  • Were the repairs or upgrades performed by a licensed contractor and with the proper permits?
  • What defects or issues were not addressed?

As a buyer of a foreclosed property, inspect and investigate! Sunset Vista Realty is ready to help. Check out our Buyer Services.

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