Thursday, February 17, 2011

Lots of "flips" in the San Fernando Valley - what you need to know

If you're a local San Fernando Valley home buyer, you've no doubt noticed a lot of "flipped" properties for sale lately. (A flip is a property that somebody bought cheaply, fixed up and is now selling for a profit.) Buying an already-fixed up home can be a great choice, especially if you don't have the time, money or talent to do any fixing up yourself.  Trust me, remodeling is nowhere near as fast or easy as it looks on HGtv.

However, here are some things to be aware of, if you'd like to purchase a flipped home. First, not all lenders will fund a loan on a flipped purchase.  Second, loan approval may take a little while longer than normal.  Underwriters usually scrutinize the chain of title, especially if the house was previously a foreclosure.  And lenders will also want to see proof of the cost of the upgrades over the previous purchase price.  Third, the flipped properties still have to appraise to market value and can't be priced considerably over similar recent neighborhood sales (this is good news for buyers).  Finally, even if the house looks great, get a professional inspection.  As an old colleague of mine used to say, "A coat of paint can hide a world of sin." You'll want to know that corners weren't cut on home systems that you can't readily see, like plumbing, foundation or HVAC.  Along those lines, professional contractor-flippers usually do better with repairs and upgrades than individuals.  Happy hunting.

1 comment:

  1. phyllis4:39 PM

    Another informative & timely post. Judy, I love, your blog.