How to tell if a Calgary house has been flipped
Have you ever watched a house in your neighbourhood being renovated and you can just tell that it’s not being done well? It’s excellent fodder for reality TV personality Mike Holmes, but a house that’s been renovated either cheaply or quickly might turn out to be a lemon. So, if you’re a buyer, take precautions before that amazing deal goes sour.
What is a flip?
A home that is purchased, renovated and put back on the market in short order is a flip. These homes can be problematic because they are often given a cosmetic facelift without regard to good workmanship. The individuals or companies that flip homes capitalize on the potential buyer’s lack of understanding of what’s behind the walls. If it looks shiny and new it might hide the fact that the workmanship was very poor. The owner is counting on the fact that looks can be deceiving. The house has been transformed for the sole purpose of making money. Once the home is sold, and the home flipper is out from under his mortgage payments which he must make during the renovation, they don’t care about problems because it’s the new owner’s responsibility.
There are warning signs
The good news is that you don’t have to be a professional to know whether the house you like is a flip. You can often figure it out even before hiring a home inspector to check it out. It’s a matter of common sense.
Are the kitchen and the bathroom both re-done in this home? Ask the owner, through your REALTOR®, questions about the renovation. How long did it take, who did the work, where did the materials come from and even ask for receipts? Here’s a yardstick: An ordinary kitchen renovation done to code with good materials and workmanship can cost about $30,000. A bathroom renovation can be in the area of $20,000. If the renovation only took a few weeks, that is a red flag.
Can you check out if permits were taken out for any of the work. Were gas lines moved? Plumping replaced? Was the structure altered such as the roof or the removal of walls. If there weren’t then you need to go to Plan B, which is having them inspected yourself if you are serious about moving forward on an offer.
Shortcuts and sloppy work
Because time is of the essence for home flippers they tend to take shortcuts, or if something isn’t done well it will often be left instead of ripped out and re-done, deemed to be “good enough”. Things like flooring, trim, bad painting not to mention cheap material. If you can see visible evidence of where corners might have been cut, who knows what’s going on behind the walls?
Where it matters
If the home flippers actually appeared to make improvements behind the spit and polish, find out how much they actually spent. If they put in new windows, what kind of windows are they? Energy efficient, triple glaze or rejects from a reusable or recycling store? Poor windows will cost you down the road. New windows for a home are well beyond the $10,000 mark.
If you have done your homework and things check out, go ahead and put in an offer but make a home inspection a condition of sale.
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