Dallas Real Estate Agent Offers Ten Tips On Spotting A “Flipped” House

Dallas Real Estate Agent Offers Ten Tips On Spotting A “Flipped” House

For years there have been a lot of foreclosures, but in the past few years I have been seeing more properties that have been “flipped”. Some of these transactions have included some degree of irritation with the investor-owner who operates with bottom line mentality; others have been like a continuing bad dream.

A “flip” is a distressed property bought by an investor below market price. The investor then invests “x” dollars and resells at market price. The problem: how the investor spends on the house.

So buyers – listen up! Typically, investors spend most of their money on cosmetics (the lipstick and rouge approach) such as expensive granite counters; “designer” paint; fresh landscaping; new carpet and maybe tile flooring; new light fixtures and fans; maybe a new shower and vanity in one bathroom; sometimes new appliances; even some crown molding. Many times, the house shows well and the look of newness has a seductive influence on a potential buyer.

Protect yourself by looking for issues such as:

• ignored foundation problems,
• either a worn out overlay roof or a bad roof job;
• a really old water heater or one that has been incorrectly installed;
• an HVAC that is toast;
• wiring issues; even faucets that fall off the wall when you touch them (that’s right, I’ve even seen those).
• Or how about the house where one bathtub drain was filled with hardened grout!

Another time I came across an older house where the investor owner had moved the replaced furnace to the attic. The problem: he cut out part of the A-framing (a/k/ a part of the house structure) so he could shove the unit in more easily; and he didn’t install a catwalk or even a ladder to access the attic for service and repairs.

Many investors seem to think they are exempt from disclosures since they haven’t lived in a property. They are wrong! They have at least limited information on the property because it wouldn’t be unreasonable to think they approved the property’s rehab (and
that term is used loosely) expenses.

Finally, buyers can expect more than a few investor-owners to be less than reasonable about responding to repair requests after inspections that shine the light on a property’s defects.

So buyer beware.

Becky Hopkins is a realtor with CENTURY 21 Judge Fite Company and serves the Dallas/Fort Worth Metroplex. You can contact directly on her phone (469-568-7654) and through her website www.50andholding.com.

Advertisement