Beware of Lipstick Flips
Have you ever looked at a property that was “flipped” or “rehabbed” and thought it seemed “too good to be true”? Well, there’s a reason for this, because many times these are “Lipstick Flips.”
What is a “Lipstick Flip,” anyway? A “Lipstick Flip” is one where the rehab on the property has been kept very minimal. Touch-ups to cabinets, fresh coats of paint on walls/doors/trim – basically just enough to make the house look nice for showing.
Lipstick Flipping is done in hopes of “showing” the property well enough to “steal it.” The “Lipstick Flip” attempts to distract the buyer from the lack of “meaty rehabs,” like replacing all flooring, drywall, etc.
Don’t worry, not all flipped homes are money pits. Prescott has many homes to offer. Some are recently renovated, some are simply beautiful. However, always lean on the side of caution when looking to buy a flipped home. While many are upstanding folks, there are those out there who will cut corners to boost their return. Just take a quick look at the quality of the products used and the renovation details before getting ‘wowed’ by the fresh new paint.
Once buyers close on a home, they’re responsible for the home. This includes issues that may be costly to repair or remain simply unsafe for habitation. This is why it’s vitally important you take the necessary steps to protect yourself before signing off. Here are some tips to prevent the headache and heartache of a bad “lipstick flip” home:
- Do not waive the inspection. In addition to the usual areas, inspect the attic, and mold is inspected for exposed wiring. Include a termite inspection.
- Ask for a complete list of all work done with receipts for the work.
- For all work done, make sure the seller uses a licensed contractor.
- Ensure the work on the home passes inspection and is up to code. Request a copy of the certificate of occupancy.
- Ask the seller for a current disclosure statement, as required by law.
If the seller balks at these requests, it may be necessary to pass on the home. If issues come up during inspection, you may change your mind about the house, or you may negotiate for repairs or closing credits, depending on your agent’s advice.
When buying a home, always get reports from an engineer, inspector, or contractor that have nothing to do with the selling party. Always have a professional look over any “Lipstick Flip,” no matter how nice it looks! They can provide invaluable information in determining issues with your “lipstick flip” house before they become major problems.
As a trusted real estate advisor, I like to ensure my clients don’t get burned! Let me use my years of experience and help you look for your next home.