Thinking about buying a “flipped” home in West Palm Beach? You’re not alone. Many buyers love the convenience of buying a home that looks and feels like new. And investors have taken note – in the third quarter of 2014, 5.9% of sold homes in West Palm Beach were flips, and 6.3% or the same period in 2015.
What’s a “flipped” home?
A home is considered “flipped” if a purchase and sale occurs in less than 12 months. Generally, the formula is the same. An investor will buy a home at a foreclosure auction at a steep discount to parable home prices with cash. Usually, he doesn’t even see the home before he makes the bid.
Once he has the keys, he (or his contractors) basically tear the house down to the studs. Room by room, the home is re-built. New drywall, new stainless steel appliances, new bathrooms, and floors are installed. Often, the home needs electrical and plumbing improvements, which a good flipper will take care of before re-building. A good flipper will also go the extra mile to add nice touches like statement lighting, or upgrades in the kitchen or to the floor.
Within a few months, the house is finished and ready to be listed for sale – often at a price at or above comparative homes in the neighborhood.
Should you buy a flipped home in West Palm Beach?
The answer is, like all things real estate, it depends. Whether you should buy a home you know to be flipped is a personal choice. For the buyer who wants it all, but doesn’t have the first clue how to do anything around the home, then yes, you should consider a flip. If you’re a seasoned trade worker, or you have someone in your family who is skilled and “handy” (who doesn’t?), then you may be able to do upgrades yourself – but don’t underestimate how much work and money will be involved.
Most buyers are somewhere in between. My husband, for example, is smart and self-taught, and he can be very resourceful and handy. He has completed some really nice projects around the house – an outdoor shower, barn doors in the living room, and even installed some safety flood lights around the house. But would I trust him to renovate an entire kitchen? The answer is NO! Performing major upgrades, like a new bathroom or new kitchen, is just too important to leave to an amateur.
So when we were looking for our home, we were open to a flip, if we came across one we loved. And we did! We purchased our home in 2014, which was a flipped home, and it was obvious the owner did a great job with it. Which brings us to our next point…
How do you know the flip was done well?
Making a judgement on how much time, effort, and money was put into a flip is important, because if you’re going to buy a flipped home, you want to be relatively sure the owner didn’t cut corners on you.
One way is to check with the building and code enforcement agency for the city to see if permits were properly opened and closed. The theory here is that if the investor and/or builder pulled permits, then they are following the rules, and their integrity – and possibly their work – is in question.
Also, looks at the work itself – inspect the home closely. Look closely at the materials used, and the appliances purchased. What kinds of countertops do you have? If they are granite, that’s good. Marble is even better. Formica? Probably not a sign the the investor takes pride in his work, or was willing to stretch his budget to get the job done well, and done right.
Look at the appliances – did the investor buy the off-brand blue-light special, or did he put his money on Maytag? Is it fully stainless steel, or brushed aluminum? How about the faucets and fixtures? How was the inside designed? Does it look like some thought went into the design of the kitchen, and the bathrooms? If so, he probably hired an interior decorator – and that’s a good sign.
Whether you should buy a flipped home or not is a personal choice. Many factors come into the decisions – budget, and most importantly, your wants and needs in your home search. If you must have a 2-car garage, for example, then whether or not it’s a flip shouldn’t matter much.
On the other hand, some people seek out flips. If you want to have the smallest house in the most expensive neighborhood, then a flip is a great way to get there.
If you have questions about buying a flipped home, call the Realtors at 561-500-LIST (5478), and we’ll be happy to answer your questions!