4 Little Things That Could Signal You’re Buying a Hurriedly Flipped House

 
 

Buying a flipped house has a lot of appeal: They’re usually attractive, move-in ready homes with updated fixtures, appliances, and finishes.

However, the quality of renovations done during the flipping process is a big factor for a potential buyer to consider. While some home flippers do top-notch jobs and pay attention to every detail while updating a property, others do it in a rush to make a quick buck — sometimes with subpar work.

While an inspector should point out the major flaws in a home before you buy it, such as roof or foundation issues, there are smaller red flags you can look for while touring a property that indicate it may have been flipped in a hurry.

Darin Bruck, an Atlanta home inspector with 20 years of experience, recently posted about this topic on TikTok. In his video, he says some surefire signs of a too-quick flip include loose railings that have been poorly reinforced, painted-over water damage under sinks or on ceilings, painted-over dust in air vents, smoke detectors that weren’t replaced, or leftover renovation debris remaining in the home.

I also turned to Delaware flipper Robyn Kessler, who has been buying and selling homes since 2005, for some pointers on shoddy flips as well. Here are four things she says to watch out for.

Cracked tile

You might spot a cracked tile and figure that’s an easy fix. However, it could indicate a much bigger problem: the flipper might not have laid the subfloor correctly, Kessler says.

“This one particularly makes me angry because putting in the correct subfloor and adhering it well so it doesn’t bounce when you walk on it would not have cost more than a few extra dollars to do it right — so it can hold the tile floor and whatever is going on top of that,” she says.

She remembers one scenario where a heavy clawfoot tub was going to be placed in a tiled bathroom with a faulty subfloor. “That would have been a scene from “‘The Money Pit,’” she says, meaning that the tub would likely have crashed through the weak floor and fallen to the level below as it did in the 1986 Tom Hanks/Shelley Long movie.

Crooked cabinets

In the kitchen, don’t just look at the amount of cabinet space or the quality of the hardware. Check to see if the cabinets are properly aligned vertically and horizontally. If not, “that’s a sure sign they weren’t level and even all around,” she says.

Ceiling spots

Always look at the ceilings for signs of water damage, Kessler says. If there’s been a leak, you can usually tell by spots, patches, or discolored paint. Be sure to check around light fixtures, where water is likely to pool. If you see signs of water damage, ask the seller what happened, because it could indicate a problem with the roof that might not have been properly addressed — leading to costly expenses down the road.

“Go to the attic, and look up at the inside of the roof, if you can,” she says. “Roofs are expensive to replace, and if there’s a leak, you’ll see it there.”

Shoddy painting

If the flipper spent the time and money on a proper paint job, you shouldn’t notice things like uneven edges, errant drips of paint on fixtures or the floor, or electrical outlets and light switches that have been painted over instead of removed first. “These items are really cheap to buy and easy to change out, so I don’t know why some people do this,” Kessler says about the outlets and switches. She also advises looking closely at the baseboards and checking to see if they were cleaned before being painted.

Kessler’s advice to potential buyers of flipped homes? “It’s important to be informed,” she says, regarding quality workmanship, how to spot it, and how much it costs. “If you don’t like to get your hands dirty and fix things around the house, then homeownership may not be for you.”

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People Want Less Expensive Homes – And Builders Are Responding

 
 

In today’s housing market, there are two main affordability challenges impacting buyers: mortgage rates that are higher than they’ve been the past couple of years, and rising home prices caused by low inventory.

To overcome those challenges, many people are working with their agents to find less expensive homes. And with newly built homes making up a historically large percentage of the total available inventory today, that search often includes brand new homes.

People Are Spending Less on Newly Built Homes

The graph below uses the latest information from the Census to show, in June, more of the newly built home sales in this country were in lower price ranges than in 2022:

 
 

Last year, only 58% of newly built home sales were less than $500,000. This June, that number was up to 65%. This means more people are buying less expensive newly built homes right now while affordability remains a challenge. 

Builders Are Offering Lower-Cost Options

Builders have picked up on this trend and are reacting accordingly. George Ratiu, Chief Economist at Keeping Current Matters, explains:

“Builders are also responding to this shift by bringing slightly smaller homes to market in an effort to meet lower price points . . .”

New data from the Census further confirms this pattern – it shows the median sales price of newly built homes has dipped down in recent months (see graph below):

 
 

And as Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, says, the builders who are most responsive to this trend are forming pathways to homeownership:

 “. . . it is creating opportunities for people to be able to afford an entry-level home in an area. . . . if you get that size down, that automatically will make it a more affordable home. The [builders] that are decreasing [size] the most are probably the ones that try to build more of an affordable product.”

 How an Agent Can Help

 Builders producing smaller, less expensive newly built homes give you more affordable options at a time when that’s really needed. If you’re hoping to buy a home soon, partner with a local real estate agent to find out what’s available in your area. An agent can help you look at newly built homes or ones under construction nearby. 

Bottom Line

If you’re having a hard time finding a home you like in your budget, connect with a real estate professional. You need an agent who knows all about the latest inventory in your area, including homes still under construction or just built. That way you have an expert on your side who can provide information on builder reputations, builder contracts and negotiations, and more to help you with the homebuying process.

Get more info on Keeping Current Matters.

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Yes, You Can Compete With All-Cash Buyers—Here’s How

 
 

To some of us, all-cash buyers are the scourge of the superhot housing market: They swoop in, supervillain-like, and snatch up the most beloved and valuable properties from under our noses.

Or at least the ones you might have loved, had you not been stuck with that pesky mortgage contingency.

Competing with cash buyers isn’t impossible, just difficult.

Sure, some sellers will take the major moolah every single time and there’s nothing you can do about it. But if you go in with a strategy, you might just have a shot. Here’s how to create one.

1. Figure out the seller’s goals

Determining what’s most important to your seller can be key to getting your dream home—even when you’re competing against an all-cash buyer.

“People often think that all sellers want the most aggressive, quick close, for the highest price. That’s not always the case,” says Shashank Shekhar, founder and CEO of Arcus Lending in San Jose, CA. When he sold his home earlier this year, the most important factor was getting back two months’ free rent, because he was also trying to buy.

“Even if the price was slightly lower but came with that offer, we would have taken that over all-cash,” Shekhar says. “Understanding what the seller needs is always the most important thing.”

2. Consider your contingencies

If you’re willing to forgo a home inspection or secondary appraisal, you may have a leg up over buyers who won’t.

“If you’re going to compete with a cash buyer, the contingencies may be a concern for a seller,” says Joe Petrowsky, a mortgage broker in Manchester, CT. “If the prospective buyer is willing to eliminate the contingencies, that may be an incentive for a seller, especially if there are some issues with the property.”

This isn’t necessarily the best strategy. Without a home inspection, for instance, the property could have crippling issues that might have precluded you from purchasing, had you known. But if you’re dead-set on this exact house and you’re pitted head to head against a cash buyer, it might be an option to consider.

Of course, there’s one contingency you can’t remove: the mortgage. (Hey, if you could, you wouldn’t be reading this right now!)

3. Get pre-approved…

You can help soften your mortgage contingency by getting pre-approved—and offering a strong pre-qualification letter from your lender. If you’ve saved up a significant down payment and have excellent credit, this might be your winning strategy.

“The seller or their agent should understand there really isn’t a chance the loan will not go forward,” says Petrowsky. With great financials and a large down payment, your mortgage officer can go to bat for you with the sellers, promising nothing serious will happen in the delicate time between offer and closure to compromise their money.

“Make your offer as cashlike as possible,” Shekhar says. “The No. 1 reason transactions fall through is because the loan gets declined during escrow.”

4. … but make sure your mortgage broker is great

“I see pre-qualifications all the time that are not worth the paper they’re written on, because the broker doesn’t know—or hasn’t done—the due diligence on the prospective buyer,” Petrowsky says.

How can you make sure your broker is worth his salt? Both Petrowsky and Shekhar recommend researching online beforehand, keeping an eye out for any negative reviews indicating mortgages that fell through at the last minute.

You’re looking for someone who’s thorough: “We do a lot of due diligence to make damn sure that person is going to get a loan,” says Petrowsky.

After all, sellers often go with all-cash “because they don’t want to get in any hassles during the loan process,” says Shekhar. “Give them that comfort, that safety.”

Keep reading.

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Central Oregon Real Estate Market Report from July 2023

 
 

Thank you to Beacon Appraisal Group for compiling this report. Prepared by Donnie Montagner with information from the MLS of Central Oregon with permission from COAR.

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Just Listed: Turnkey Vacation Townhome in Eagle Crest Resort!

 
 
 

Turnkey vacation property in one of Central Oregon's favorite resort communities, Eagle Crest!

Whether you're looking for a producing investment property or a low maintenance fun place to call home, this townhome fits the bill. The expansive patio with hot tub overlooks blue skies, golf course greens and open common space is ready for entertaining or relaxing. With the primary suite, laundry and guest powder room on the lower level and two additional bedrooms with a Jack & Jill bathroom upstairs, the floorplan is ideal. A lockable storage closet accessed from the front porch is perfect for your personal belonging or housekeeping items if the home is used as a rental. Best of all, this is an end unit townhome offering maximum privacy for anyone lucky enough to stay here. Resort amenities include golf, tennis, pools, gyms, and miles of biking & hiking trails. Sunshine, wildlife viewing, smiles and laughter all come at no extra charge!

Listed by That Furrow Crew for West + Main Homes. Please contact John for current pricing + availability.

 
 
 

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