Buying a flipped home is desirable for buyers who are looking for something move-in ready.
Yet, behind the curb appeal and shiny finishes, everything may not be as it seems.
Kellen Mullen purchased her dream home from a flipping company.
"It had a new kitchen. It had new bathrooms; it was freshly painted," she says.
But within days after she moved into the home, she says her dream turned into a nightmare.
According to Mullen, the bathroom vent cover fell onto the toilet while they were using it. Then she says the wiring in the kitchen was not up to code. "We lost power to this side of the house," when she said she turned on the fan to the stove.
Then, while washing dishes, "within about 10 seconds the drain starts backing up."
Watch Kellen Mullen recount how her flipped home revealed its faults:
Plumbing problems turn into thousands in repairs
Mullen says when all the drains in the house stopped working, she called a plumber.
"They told us we had a real big problem. I think they were out here about 10 hours." That was because her sewer line was clogged with tree roots.
When all was said and done, Mullen says she was out almost $20,000.
Nick Gromicko, founder of the International Association of Certified Home Inspectors or InterNACHI, says many homebuyers are concerned about their budget when buying a home, but a professional home inspection is one place where it pays to spend a little more.
"All throughout the transaction, it's all about trying to reduce costs,” he said. “And I think when you’re going to get to a home inspection where you're spending only hundreds of dollars to look at something that costs hundreds of thousands of dollars, it's time to stop thinking like that.”
How to protect yourself and avoid surprises
Gromicko suggests making sure the inspector is licensed in your state and is certified — providing proof of their specialized training.
If you’re concerned about a conflict of interest between the inspector and your realtor, he recommends finding an inspector outside your local area.
“Pay them extra for travel time,” he says. Find an inspector who doesn't know your real estate agent, doesn't care to know your real estate agent, doesn't ever want to come back to your town and do inspections,” he says.
"This way you can remove the conflict of interest by getting someone truly independent geographically.”
For an additional cost, Gromicko advises hiring a certified master inspector, since they have an extra three years of training.
Thinking outside the scope of what a basic inspection usually covers is also important, according to Gromicko, such as add-on services that could protect you down the road like radon testing (if not required in your state) and having the sewer line checked, which Mullen says was never offered or done in her case.
Gromicko also says that inspectors aren’t just important during the home-buying process.
It’s “not only just picking the right inspector but picking the services that that inspector offers to protect you after the sale,” he says. He recommends getting air and emissions insurance, if not required by your state, as well as a warranty for repairs or replacements of issues that may arise after the initial inspection.
Overall, Gromicko says, when you’re purchasing a home that’s been flipped, it’s important to remember that house flippers aren’t homeowners.
They haven’t lived in the home and taken care of it, and they’re not always focused on getting the job done right. They’re in it for profit, which means that some flippers may cut corners or conceal issues.
He admits that the inspector can do everything correctly, but he says “what we really can't do is, someone who's hell bent on tricking the inspector. I mean, if they're working to trick us, they can do it.”
Buying a house requires some research. According to Gromicko, it may be worth finding out how many previous owners the home has had, like the way you’d buy a used car.
“You could look at the tax records, which are public records in that town,” he says. “If you see that Elliott and Mabel owned that house for 35 years, passed away, a flipper bought it, cleaned it up, and put it up for sale. You can be pretty assured that it wasn't a meth lab.”
We reached out to both Mullen's realtor and the flipper's realtor.
However, both told us they were unaware of any serious plumbing issues with the home, or they would have had them corrected before the sale.
Her realtor said Mullen's only hope at this point may be hiring an attorney, as no one is obligated to pay for repairs if the problems were not discovered until after the sale.
Mullen says she is not so sure that is the case, but she is now trying to make the best of a bad situation.
"We're stuck with a $20,000 problem and somebody knew,” she says. “Somebody knew there was a problem, and didn't tell the next person, and we got stuck with it."
If you’re interested in buying a flipped home, do your due diligence. Hire a certified home inspector and ask a lot of questions. That way, you don’t waste your money.
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