Ask any Yorba Linda Realtor® about “flipped” houses, and you’ll get everything from eye rolls to sighs of frustration. Flippers — investors who buy dated or neglected homes and fix them up before listing them for sale — are ubiquitous in Southern California today.
Home buyers tend to gravitate toward flippers’ listings because they may look like the perfect turnkey home — at least on the surface. But as with all major purchases and investments, let the buyer beware.
Before you buy from a flipper, be sure you consult with an experienced Yorba Linda Realtor® to determine if the house is a worthy investment.
Why You Should Proceed with Care When Buying a Fix-&-Flip House
Flippers typically have not lived in the houses they buy to fix up and sell. Legally, this may give them some leeway in disclosing particular problems with the home. They may form a single-purpose business entity, such as a limited liability company (LLC), that is used only for a single property. So if you later identify a defect with the home that should have been disclosed by the seller, it could be difficult to get legal recourse, even if the laws are on your side.
In some cases, the flipper may not have been given the straight story by the original seller. Flippers tend to buy distressed properties, and they may not have done enough homework of their own to discover potential defects.
Determine the Nature & Extent of the Renovations
Time is of the essence for flippers, because the longer a house takes to fix up and sell, the less money they stand to make. Consequently, some unethical flippers may try to mask more serious problems with new paint and floor coverings.
Ask what renovations or modifications the flipper did to the home and who performed the work. If the work was done by licensed contractors, those contractors have a legal responsibility to comply with building codes and standards. They likely also have to warranty their work for some period of time.
Finally, ask whether the flipper obtained a building permit to do any work. Minor finish work typically does not require a building permit, but any work on major systems or structural components likely would have required a permit.
If the flipper did any significant work on the house without a permit or without using licensed contractors, that’s a good indication that you should look a little further into the condition of the home.
Trust a Yorba Linda Realtor® to Help Guide You
When you have a licensed, experienced Realtor® on your side, you give yourself an extra layer of protection.
Although most real estate agents are not contractors or home inspectors, your Realtor® can provide an opinion on the work and assist you in finding a qualified home inspector to really dig into the condition of the home and the quality of the work that was done.
Most flippers working in our area today are ethical and above-board, and you can probably buy with confidence after doing your due diligence. But it pays to be cautious whenever you purchase real property, to ensure you know what you’re getting into.
The Edie Israel Team of professional Realtors® helps home buyers and sellers with all their real estate needs. Contact us today to learn more about why it’s important to have a Yorba Linda Realtor® on your side in any real estate transaction.