Key takeaways
- The exterior of a flipped home is one of the easiest places to spot poor workmanship — gaps where the roof meets the siding, wavy siding boards, mismatched or layered shingles and downspouts that do not carry water away from the foundation are all signs that a flipper cut corners.
- New paint, flooring and staging can mask serious problems, so use your hands and your nose as much as your eyes.
- Research the property records and get a professional inspection before you close.
Buying a flipped house can be a good deal or a costly mistake. The quality of rehab work varies widely, and some investors cut corners to finish on time and within budget.
The good news is that poor workmanship leaves visible clues. Here is what to look for before you commit.
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Start with the exterior
Walking around the outside of a house is one of the simplest ways to find structural problems, said Bert Miskell, owner of BPM Heating, Cooling & Plumbing in Frederick, Maryland. He offered the following advice:
- Check where materials meet. Pay attention to where the roof meets the siding and where the siding meets the foundation. Gaps, uneven lines or excessive caulk usually indicate that water infiltration has been a problem.
- Look at the siding. Wavy boards typically mean the sheathing underneath was not replaced or nailed correctly.
- Inspect the downspouts. They should carry water several feet away from the structure. Flippers sometimes skip extensions, which can lead to a flooded basement.
- Examine the roof from a distance. Pay attention to the lines of the shingles. Wavy edges or mismatched shingles can indicate that a flipper covered old layers instead of performing a full tear-off.
Homes in humid climates such as Miami and coastal areas face additional risks, said Miltiadis Kastanis, a Compass real estate agent in Miami, Florida.
"They can corrode metal, wear down HVAC systems and weaken concrete over time if the waterproofing wasn't done right," Kastanis said. Look around balconies, roofs and window frames for signs of water intrusion or rust, she said.
Other exterior red flags to watch for:
- Sagging crawl space floors
- A chimney that leans to one side
- Cracks in the foundation
- A yard that slopes toward the house rather than away from it
- A deck with cracks, sagging boards or loose railings
- An outdoor HVAC unit showing wear and tear, with vents that are improperly installed or not venting away from the house
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Pro tip: Check less visible spaces, such as underneath basement stairs, for signs of water damage.
Look at the quality of materials
Note the materials the flipper used, said Paul Dashevsky, co-founder of GreatBuildz.com, an Encino, California-based service that matches homeowners with pre-screened general contractors.
See whether they used respected brands for appliances, fixtures and finishes, he said. Ask about the type and manufacturer of insulation and check for its quality. Well-done work is a sign that corner-cutting was not an issue.
New paint, flooring or heavy staging can hide problems, Dashevsky said. Watch for musty smells, uneven flooring or new caulking around cracks, which may suggest water damage or foundation issues.
Dashevsky also offered these hands-on checks:
- Run your hand along the freshly painted wall. Can you feel bubbling spots that may be hiding water damage?
- Step firmly on the corners of every room. Can you feel soft subfloors over the new vinyl planks?
- Are the doors properly aligned? Do they open and close smoothly?
- Do windows open easily and seal correctly? Are there noticeable drafts?
- Are outlet covers and fixtures installed evenly and securely?
Moisture is the biggest problem in basements, Miskell said. "Trust your nose. If there's a musty or damp smell, that's often a sign of water damage, even if the walls look freshly painted."
Inspect the bathrooms and kitchen
When looking at a flipped home, it is important that the plumbing is functioning properly, said Brendan McCarthy, director of residential service at SALT Service Co. in Austin, Texas. He recommended the following:
- Inspect the shutoff valve leading into the home. Run a hand around it and feel for moisture. Is hard water building up around it?
- Turn on every faucet and let it run to see whether water pressure fluctuates or if the drain gurgles.
- Flush toilets and look for leaks. Listen for odd sounds.
- Check behind bathroom and kitchen sinks. Look under the sink area for water stains, soft wood or poorly glued PVC fittings.
- See whether the valves under sinks are new or if they have hard water buildup around them.
"If you see a mix of copper, PEX and PVC pipes tied together with adapters, that's a sign of a patch job instead of a proper re-piping," Miskell said.
Pro tip: Feel under countertops to determine if they are solid stone or have a laminate covering such as wood or wood composite. The quality of the materials can signal the quality of the overall flip.
Check the mechanical systems
Replacement of a mechanical system is a major indicator of a contractor's quality of work, said Mike Nielsen, a sales manager at Churchill Mortgage in Hingham, Massachusetts.
- HVAC brand. Check whether the heating and air conditioning system is from a reputable manufacturer, Nielsen said.
- Furnace filter. Check the furnace or heat pump filter, Miskell said. "If it's dirty, you can bet the system hasn't been serviced in a while."
- Sump pump. Check that the sump pump actually runs, Miskell added. Some flippers install one just for show without wiring it to the electrical system.
- Ductwork. Ductwork that looks freshly spray-painted does not necessarily mean it has been properly sealed, Miskell said. "Run your hand along the seams while the system is running. If you feel air escaping or hear a faint hiss, the joints weren't sealed properly. Real sealing uses foil tape or gray mastic paste, not paint."
Research the property records
A trip to the local clerk's office or a search of public records can reveal a lot about a flip. Check for the following:
- Ownership timeline. How long did the flipper own the home? A very short ownership period with extensive renovations may be a red flag.
- Permits. Were permits pulled for the work that was done? Find out what types of work require permits in the jurisdiction.
- Inspections. Was there any work that a municipal building inspector ordered the flipper to fix? Did the flipper get a reinspection?
- Contractor credentials. Are the contractors who performed the work reputable and licensed? Verify business licenses for flippers and contractors.
- Liens and taxes. Are all tax payments up to date? Are there any liens on the property?
Get a home inspection
If you are interested enough to make an offer, get a professional inspection before you close. An inspection can identify problems that are not visible during a walkthrough, including electrical issues, hidden water damage, structural deficiencies and code violations.
The cost of an inspection is small relative to the cost of discovering a major problem after you own the home.