When you buy a flipped home, it means someone else — usually a real estate investor or a contractor — bought the home first and either made improvements to the property or waited for an opportune time to resell with the goal of making a profit. There are a few clear indicators that a home may’ve been recently flipped. The most obvious is if the property sold to the current seller within the last year. Other telltale signs include: bathrooms and kitchens with all or mostly new fixtures, retrofitted windows, and factory-finished cabinets.
But is buying a flipped home a smart move for you? It depends on the house, the quality of the flip, and the kind of buyer you are. Let’s take a look at some of the pros and cons.
Pro: You want a move-in ready home
Especially in areas with a large quantity of old housing stock, there can be a great demand for move-in ready homes. If you’re not a DIY-er and you don’t want the headache of hiring contractors to update a home yourself, a recently flipped home can be a good option. But keep in mind: just because a home’s been flipped doesn’t guarantee all major repairs have been made (or that repairs and updates have been made well). Generally speaking, however, in a flipped home you’ll often find the walls freshly painted, the floors newly carpeted or refinished, and kitchens and bathrooms that have been updated with new appliances and modern finishes.
Con: You’ll be paying a premium
The point of flipping a house is to make a profit. That means buyers of recently flipped homes are typically on the expensive end of the buying proposition — someone else has put in the money to update your soon-to-be purchased home and you’re going to pay a lot more than they did to own it. If you’re worried about how much house you can afford or are looking for a home that’s under market value, then a flipped home probably isn’t the deal for you.
Con: You want to choose your own finishes
If you have a particular vision for your home or you want more control over design choices and finishes, a flipped home may not be the right choice for you. Ditto for the lover of original detail. Flipped homes generally don’t preserve things like antique light fixtures or original tile jobs. If you find yourself wanting to change many of the finishes that’ve been recently installed in a flipped home, it may not make sense for you to pay a premium for a home that’s been updated in a style that doesn’t suit your taste.
Con: It’s a bad flip
House flippers need to turn homes around fast to make their investment worthwhile. Oftentimes, that can lead to cutting corners and doing as little as possible to get a home back on the market. In some case, homes that have been reasonably updated with cosmetic improvements may still have expensive and potentially important problems lurking: an old roof, a cracked foundation, electrical and plumbing updates, aging HVAC systems, and other significant repairs.
Work on flipped homes is also sometimes done quickly and carelessly. Look for bad floor installations, poorly hung cabinets, doors that don’t latch or close correctly, and mismatched finishes for signs of a rushed job.
And always check with your local jurisdiction’s building department to see if the work done on a property was permitted and are in compliance with building and safety codes.
Pro: It’s a quality flip
Let’s face it: buying a home can be an expensive, confusing, and stressful proposition. When a reputable investor and contractor do it right, a flipped home can be a lifesaver, sparing you the time and headache of hiring an architect and contractor to do the work yourself (there’s also the bonus of having the costs of a renovation built into your mortgage).
If you’re going to pay a premium for a flipped home, always look for a quality job that’s been done by a licensed contractor with permits, request a list of all recent work done, and require a professional home inspection before closing.
And remember: whether or not you end up buying a flipped home, be sure you have the right homeowners policy in place to keep your home and your things safe. Get a free quote today.