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  • Writer's pictureNeal Wilson

Red Flags in Flipped Homes and the Value of a Pre-Bid Walk Through

Had a call today with a recent client that cancelled a deal after considering the home inspection report. This happens a lot on flipped homes because buyers don’t recognize some of the clues that an old house was renovated with a bad ratio of profit to quality.

This particular house had some easy red flags that are worth sharing for the benefit of other home shoppers looking at “flips”. For starters, it had nice new shingles but the surface of the roof had a slightly rumpled or wavy appearance. Generally this is a sign that new shingles were laid over either old, tired shingles or old sheathing, the wood substrate under all shingles. In this case, my inspection of the attic revealed rotten, moldy, termite-damaged sheathing that the builder left in place when re-roofing. This roof will fail in a much shorter period of time than the shingle warranty suggests and that warranty will be null and void due to the sheathing.

Another readily evident cost-saving measure on this project was the siding. The house had just been freshly painted, but a quick look revealed that part of the house was sided with aluminum and the rest with vinyl. And then all of it painted. It‘s not really a “defect” with respect to the NJ Standards of Practice, but it’s a red flag that profit took precedence over everything else in this project.

And the last glaring red flag for me was found in the basement. We always look closely at the sill plate when visible, the critical piece of lumber sitting on top of the foundation and supporting the framing of the wall above. It’s often a place where wood destroying insects or moisture has done damage that should be noted/repaired. I found evidence of termite damage in a spot but just to the right the builder had applied a cement parging, like frosting on a cake, to hide the rest of the sill. This kind of concealment is all too common in “flips” and raises questions about literally everything the builder has done.

All of this just to say that a thorough home inspection is critical due diligence when buying any home.

And remember, I offer pre-bid walk-through consultation. This offers a buyer a chance to have me do a walk around and walk through before a buyer bids on a house. Once you have an accepted offer you start to incur all sorts of expenses to do due diligence, including my inspection, oil tank sweeps, sewer scopes, legal fees and more. In this case, a 30 minute pre-bid walk-through would have allowed me to point out to the buyer some of the cost-saving shortcuts that made this house a risky bet.

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