Gotta love a flip

HVAC attic no accessSo, you’re looking at buying a flip.

What Does Flipping Houses Mean? House flipping is when a real estate investor buys a house with the purpose of increasing its value through repairs and updates to sell it for a higher price. There are some concerns to be aware of when purchasing a flipped home. First, most states do not require the flipper to be licensed, so they are profiting from a mostly unregulated industry. You are hopefully dealing with a flipper with good construction knowledge, experience, and ethics. In many cases, just the opposite; someone with little experience only cares about profit and cutting corners. Many flippers also forgo a home inspection and learn about defects while performing repairs or from the future client’s home inspection. You should check the property’s history to help determine the last time the house was sold to help determine if the house is a possible flip.

Some of the work we have observed over the years is quality and professionalism. However, most of the flips are not. Some of the work borders on incompetence and some deception and negligence.

Some things you can do to help protect yourself while purchasing a flip.

  1. Verify that the flipper used state-licensed contractors that are insured and offer a mechanics warranty on the work performed, such as a licensed HVAC contractor.
  2. Zinco PanelVerify that all required building permits were obtained by the flipper and are closed.
  3. Verify if there was any prior mold or suspected mold and that a licensed or reputable mold abatement company abated any present if there was a request for a copy of the protocol followed for the abatement. Also, verify that post-abatement mold testing was performed and request a copy of the results.
  4. Request a disclosure of any known defects you should be aware of. Such as structural damage, insect damage, water damage or intrusion, and areas covered over or not visible. Also, ask if any buried fuel tanks or swimming pools are present to the flipper’s knowledge.
  5. You should also request a reasonable warranty on the work performed, such as a 6-month or 1-year warranty on all work performed.

It is best to request all the above in writing as you will have a written history in the event later you learn that you were lied to or deceived and need evidence for legal purposes. If you request any repairs again, request that licensed contractors perform all repairs, obtain a scope of repairs of the work performed, and request a warranty on the repairs. I also recommend verifying that all contractors and suppliers are paid in full to ensure a mechanics lien does not pop up in the future on the property.

You should approach any flip cautiously and educate yourself with the help of a good realtor and home inspector. If any flipper fails to answer your questions sufficiently, that should tell you what you need to know to move forward. I am not a fan of government regulation, but this industry has failed to police itself and needs some state requirements, just like any builder or contractor.

For a thorough home inspection to help protect yourself while purchasing a flip, call Showalter Property Consultants, servicing most of Maryland.

Stephen Lee Showalter, NACHI® CMI, ASHI ACI
Home Inspector, Environmental Consultant
Maryland State Home Inspector License #29634
ASHI ACI Certified Membership
NACHI® CMI Certified Master Inspector
InterNACHI® CPI Certified Membership
Certified Commercial Property Inspector Association
FAA Certified UAS Pilot #3987636
CRT Certified Residential Thermographer

Showalter Property Consultants providing quality home inspections and environmental testing throughout Maryland since 1988. For a quality home inspection contact us on schedule online.

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