Ever since Chip and Joanna Gaines stepped onto the scene, homeowners love finding a home to flip! There is something about turning a rundown shack into a cozy chic home that people cannot get enough of. As a home inspector, it might be smart to warn home buyers of these common mistakes associated with flipping houses.
1. Budget, budget, budget.
After homeowners find the perfect little neglected house to work their magic on, it is important that they take the time to budget for their renovations before buying. Look at your budget in four parts: house purchase, upgrades and carrying costs, selling costs and cushion. The key here is to clearly identify how much the total repair will cost and estimate how much they should be able to sell it for after the revisions.
2. Stress the importance of the home inspection before purchase.
When looking at a house that is obviously not ready for move in, it may seem obvious to home buyer as to what needs to be fixed. This, however, is often a mistake that flippers make. Something could easily be hiding under the surface such as mold or a poor foundation. A home inspection is an inexpensive way to avoid making a costly mistake.
3. DIY gone wrong.
If the house flippers are not professionals, they may run up their costs higher than expected. The home inspection process will need to be done again after the renovation, which may reveal that some issues were not resolved, or new issues were created.
4. Building permits.
There are building permit requirements that can differ based on city, county or state. It is important for the flippers to keep this in mind when taking on the project. Without doing so, they may run into problems when they go to resale the home.
Although the flipping trend may be all the rage, there are important factors that home buyers should keep in mind. As a home inspector, it is not your duty to mention these points to buyers. However, it may help with your credibility and relationship if you provided information that will help the buyers out.