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06-04-2012 05:41 AM
I'm wondering whether anyone has any expereince in buying what I'll call an "estate flip." I've seen many of these lately. They are estate sales where the house has been fixed up to look better, but has clearly been done on the cheap.
06-04-2012 07:31 AM
I have financed about 3 such transactions recently Jacklantern,
I'm not sure what you are asking but we haven't had many problems with these from the financing perspective. WHen a condition issue did come up on one recently the trustee of the estate in question did the requried repairs using our repair-escrow program which allows for the buyer to compelte the repairs immediately post-closing.
But that said...do you have a specific concern that we can address for you?
Sales Manager | Senior Mortgage Loan Consultant
Real Estate Mortgage Network, Inc.
06-04-2012 09:30 AM
any house with recent remodeling- check the city for permits and be sure the work was done right and they passed. you dont want to inherit electrical problems you have to fix. if they used cheap products like carpet and fixtures, just bid your priced based on what you feel the house is truly worth, if your out bid, walk away and look for the next one. you'll be happy in the long run.
its hard today with so little on the market. but do your homework on those permits! good luck to you!
06-04-2012 12:24 PM
What bothers me most about these is that many of the repairs--painting and floor refinishing come to mind most, but I've also seen very poor "budget" roofing in the same category--are done so poorly that they will have to be done again. I also worry that flaws have been coverted up and not actually repaired with these houses. I would much rather buy a house in orginal condition, so that I actually know what I am getting.
What I was wondering, more generally, was whether anyone has bought one of these "estate flips," as I am calling them. Did you regret the purchase?
06-04-2012 02:07 PM
I'm not a big fan of these in that most of the "improvements" are done cheaply and solely to bump the price. I have seen covered porches framed out and turned into living rooms but with no electrical outlets or HVAC just to bump up the square footage. The worse one I saw though was a town house on capital hill that had a real bad mould problem (so bad that I though it should be condemned) due to a long term leak in the roof. It was painted, had new home depot fixtures, and (the trade mark for all flippers) brown tile in the kitchen and relisted six weeks later for 300K over purchase price. I went to the open house and they had repainted the basement and but you could still see that mould was still there if you knew where to look. I have no idea how it made it through inspection unless the purchaser was paying cash.
06-08-2012 05:27 AM
One thing to check on the permits is the signatures on the permits. I had a problem with a builder (ardekanit) who had a "friend" in DCRA who signed off on all the permits that he had done. Signed off on them even though the work wouldn't have passed a normal DCRA inspector. That was a long hard battle and this builder is still in DC doing remodels with our a license