Aug. 26, 2013, 6:00 a.m. EDT
Buying a ‘flipped’ home? Be careful
More flipped properties on the market; buyers need to be careful
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By Amy Hoak, MarketWatch
Home buyers always need to have an eye out for shoddy renovation
work and defect coverups before purchasing a home. But when it’s a “flipped”
home they’re considering, it’s wise to be even more careful, making sure the
investor didn’t cut corners while prepping the home for sale.
These days, a greater number of single-family homes are being flipped, or
bought and resold within six months. In the first half of the year, flips were
up 19% from a year ago and up 74% from the first half of 2011, according to data
from RealtyTrac, a foreclosure listings website. 
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“A lot of these guys who buy these homes to remodel and flip them do a good job,” said Bill Jacques, president of the American Society of Home Inspectors, as well as a home inspector in Charleston, S.C. But, “there’s always going to be the person to put lipstick on a pig and sell it. They try to honey up these houses and paint them, put some new light fixtures in and make people think they’re in new and good shape.”
How do you make sure you don’t buy a home that has been renovated cosmetically, with serious underlying issues beneath the fresh paint? Below are some tips.
Find out who did the work
Make sure the person or company who did the renovations has been in the business for a while and has a good reputation, said David Hicks, co-president of HomeVestors of America, a company that trains and supports franchises specializing in buying and rehabbing residential properties. HomeVestors advertises using the phrase “We Buy Ugly Houses.”“It’s just like anything. If you’re buying from a builder, you would check out the builder,” he said.
But the real-estate listing may not name the flipper, so you might have to go to the county assessor’s office to find out who had the last deed on the house, LeMier said. Once you have that, you can start researching to see if it’s a reputable business.
You’ll probably also want to steer clear of novices.
“Larger investment groups doing rehab work…they will spend the money to do it correctly. Smaller investors are on a tight budget, and when they find a problem some of them will do everything they can do to spend as little as necessary,” LeMier said.
Hire a home inspector
An experienced home inspector will be able to spot some of the common shortcuts that flippers tend to take when revamping a home on the cheap. Many of the homes that are being flipped are in some state of disrepair or have a substantial amount of deferred maintenance.For example, novices will sometimes put new shingles on the roof, but won’t repair the roof decking, Jacques said. They’ll sometimes paint and caulk wood trim instead of replacing it. He has even seen old heating, ventilation and air conditioning systems painted to look like they’re newer.
Keep in mind, a home inspector won’t find all problems. They can’t see through walls to look for damaged studs or improper wiring, Jacques said. And while they do test out the home’s systems, an inspector is only in the place for two or three hours and may not see a problem that could become evident to a homeowner who lives there every day.
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