The Possible Perils of Purchasing a Flipped Property
Buying a flipped home can be a great decision. Best-case scenario, much of the fixing up is already done, and the property can be ready to live in from day one. However, a flipped home can also turn out to be a pretty surface that is hiding deeper, structural issues. A proper home inspection, important in all home buying decisions, is vital when looking into purchasing a flipped property.
Despite reports like one from The Associated Press that the average rate for a fixed mortgage rose last week to its highest level in two years, home buyers, in July, scooped up previously owned homes at the fastest pace since 2009.
Many of those previously owned homes were “flipped” or bought and resold within six months. According to The Wall Street Journal sales of flipped homes are up 19 percent from a year ago and up 74 percent from the first half of 2011.
While home buyers should always perform due diligence when buying any house, buying a flipped home requires special care. Flipped homes, by definition, are not typically sold by an owner who has invested years in care and maintenance. They are sold by speculators who buy them, fix them up, and sell them quickly for a profit.
While this doesn’t mean all flipped homes are the victim of shoddy renovation, it does mean you have to investigate before signing on the dotted line.