Beware the “Flip”

Flip (noun). A house which was recently purchased by an investor for the purpose of quickly selling it for a profit. Some investors make structural or physical improvements to the house while others do nothing.

Although these types of houses may appear to be a bargain, these transactions are dangerous for the average buyer. Here's why:

It is common for investors to hire contractors to make the improvements. Consequently, the investor lacks the knowledge necessary to adequately complete the Seller Disclosure Statement. If you see the word “unknown” frequently on a Seller Disclosure Statement, that’s a red flag. 

It is also common for the contractors to complete the process with a minimum of time and investment. Consequently, major structural or mechanical problems may be concealed rather than actually repaired. 

Tips if you're buying a Flip: 1) Make sure the investor gives you at least a year warranty for the house; 2) Also, if possible, obtain a warranty from a Home Warranty firm, such as HSA; 3) hire a home inspector to complete a thorough inspection; and 4) get lots of testimonials from past customers.