Flip or Flop?
With open floorplans, shiny new appliances, and modern conveniences like central air, it’s no surprise that renovated homes are a hot commodity in the DC real estate market. The District had the highest number of home flips in the first quarter of 2017, and Maryland came in at #5, with no signs of slowing down anytime soon. Unfortunately, some of these homes have expensive hidden issues, where developers or contractors (whether intentionally or unintentionally) cut corners or masked over costly problems that buyers may not detect before purchasing. Below are my top 10 tips for how to determine if a home is a flip or flop:
Check for permits: Here are a few places where you can check depending on the jurisdiction, most allow you to search by address:
Montgomery County: Department of Permitting Services
Prince George's County: Department of Permitting, Inspections, and Enforcement
Alexandria: Permit Tracker
Check for inspections - The permitting and inspections process varies based on the jurisdiction, contact the local office that handles this process to ask how you can obtain confirmation that permitted work was completed and inspected. In DC, inspections are part 2 of the permitting process, certifying that the permitted work was done correctly. The DCRA website (above) may not include 3rd party inspections, ask the seller to provide written documentation.
Have a home inspection done - use an inspector who is experienced, and familiar with inspecting renovated homes, ask their opinion of the quality of renovation. Not all home inspectors are the same, and it’s important that the one you choose is able to properly identify defects and deficiencies in the home. If you’re confident that your real estate agent is knowledgeable and looking out for your best interests, they likely have a good recommendation having worked with many inspectors. Otherwise, do your homework and research, more often than not I’ve found that when buyers use inspectors who were recommended by well meaning family or friends that the quality of the inspection is less than it would have been with an inspector whom I’ve tested and verified.
Check all major systems: a home that is advertised as “fully renovated” should have all a new HVAC system, roof, and the electric panel should be upgraded to modern capacity. If a home isn’t advertised as “fully renovated” you may find a mix of old and new, in this case the systems and appliances should be adequate for the size and age of the home and have a fair amount of remaining useful life. If not, the price needs to reflect the cost of replacing or upgrading.
Old houses have old sewer lines and a multitude of different issues that can cause back ups and drainage issues. Even if all of the interior plumbing in a home is replaced, the line running to the street may not be and in many cases replacing this if there is an issue is costly and the responsibility of the homeowner. Run all of the water in the house - do the shower floors have the correct slope to drain? Are the drains slow or backing up? Is there water coming out of any drain? Ask the seller what the plumbing materials are, replaced plumbing lines are typically PVC and CPVC which are durable and long lasting. Galvanized plumbing is a red flag and should not exist in a renovated home.
Attic or crawl space access - this should be included in the renovation. If not, ask the seller to add it. Without it you can’t see the condition of the crawlspace or attic (and neither can your inspector), both are important to be able to access. Although attics and crawlspaces are unfinished they are connected to the home and should also be brought up to modern standards in a renovated home. In an attic this includes proper insulation, properly rated light fixtures (if installed in the ceiling) and ventilation. In a crawlspace this includes a vapor barrier separating the damp soil from the air that will come in contact with your home and insuring that no lines have been left in contact with the ground unless properly enclosed.
License info - ask for the license and contact info for the contractor and subcontractors (electrician, plumber, HVAC etc). Even if you don’t find issues upfront, this is information you are going to want to have if something goes wrong in the future. Many contractors and subcontractors may not have an online presence, which isn’t necessarily a problem, but a little google investigation may turn up useful information.
Many small issues could mean larger issues that you don’t see. Do the cabinets open and close properly, are there visible or uneven seams in wood trim, does the overall quality of craftsmanship appear to be good? Shine a flashlight horizontally along walls to see where repairs or patches have been made, and on ceilings to see water leaks that may not otherwise be visible.
Waterproofing is critical: Rain and water in general pose a substantial threat to your home if it gets into places where it doesn’t belong. A few things to look for: Where does the water from the roof drain? Is there any type of waterproofing system in the basement? What is the grading around the house? Not all basements need waterproofing systems, but any signs of dampness, excess humidity, or mildew smell in a basement should be thoroughly investigated. The home inspector should use a moisture sensor to check basement walls.
Last but not least, trust your instincts. If you buy a house that was improperly renovated the cost of fixing the developer mistakes is going to fall on your shoulders. While no house is perfect, if it seems like a flop, don’t buy it. Don’t let yourself fall in love with a home until you have investigated the true condition, no home is worth the time and frustration (not to mention money) of having to fix work that wasn’t done properly.