Buying a flipped house in Toronto can be tempting – everything is shiny and new you won’t have to worry about a thing (or so it seems). I would know – I once bought a flipped house. But it doesn’t guarantee a stress-free experience.
With so many HGTV programs about flipping houses, Toronto contractors have jumped on the opportunity to make a quick buck: buy a house that needs TLC, add a new kitchen, upgrade the bathrooms, paint it and put in some hardwood floors, then sell the house at a profit in a few months. But home buyers beware – that house may not be all it seems to be. Did the Seller do a quality renovation? Or did he just cover up a bad and crumbling house?
How To Spot a Flipped House
- Everything is new – or at least it appears to be new. Most people renovate their homes over time, so if everything is brand new, from the roof to the appliances to the floors, it’s probably a flip.
- It was bought and sold less than a year ago, and is on the market again. Your real estate agent can dig up the historical sales information about the property, and if you’re lucky, photos of what it looked like before the renos.
- The house is vacant. Unless the property was previously tenanted or has been on the market for a long time, a vacant house is usually a sign that a property is a flip. It’s easy to spot vacant houses that have been staged to appear as though someone is living there – check the bed (air mattress or real mattress?), closets and refrigerator.
- Watch for new surfaces on top of old surfaces- countertops, newly painted kitchen cupboards, a one-piece shower insert over an old bathtub. New surfaces are not necessarily bad – but it’s important to know what you’re getting into.
What To Watch Out For:
- Flippers are great at making visible and cosmetic changes, but you never what’s going on in behind the walls – literally. Our house had zero (and I do mean zero) insulation in the walls or attic. Common sense might dictate that one would put insulation in the walls while the house is gutted and the walls are down – and yet, this is a common way for flippers to save a little coin.
- Like everything else in the world, there are good flippers and bad flippers. If you’re considering buying a flipped house, have your Realtor do some digging – has the Seller flipped houses before? What’s happening with those houses today?
- It’s common practice to ask for utility bills before putting in an offer – but keep in mind that a flipped house has never likely been lived in, so the utility bills won’t reflect the real costs of running the home.
- Old mechanicals – flippers often ignore the big ticket unsexy items like furnaces, electrical and plumbing. They may install a new faucet – but under the sink is all the old plumbing which may come back to haunt you. Make sure your home inspector gives you a good indication of what unsexy money you may soon be spending.
- And on that note…just because it looks shiny and new doesn’t mean you don’t need a home inspection. Hire an expert to tell you what’s really going on with that house.
- Was the house renovated with building permits? Flippers who don’t follow the rules are likely cutting other corners too. Did a licensed electrician change out the old electrical? Did they remove load-bearing walls?