We've all seen the house flipping shows, and many often wonder if these transformations are 'too good to be true?' Okay, maybe they are 'true,' but are the makeovers good enough to last long-term?'


When inventory is tight and newly renovated homes are wooing prospective buyers, you must take a step back and remember that the home you're hunting for is a long-term investment. Understand that there's much more to a home than what lies on the surface.


Investors who renovate homes want to maximize their profit as quickly as possible, and unfortunately, some cut corners to boost their return. Sometimes when renovating a house, an investor will do a "lipstick flip." This means fixing up what's cosmetic and leaving the rest as-is. Focusing on painting, flooring, and fixtures but not addressing foundation issues, leaks, plumbing problems, and work performed without permits.


Foundational and mechanical problems are a significant concern, but I want to caution buyers that cosmetic changes must also be inspected for quality. It only takes a little to have a new DIY floor that is installed quickly to present problems. 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 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" at home:


  • Do not waive the inspection. In addition to the common areas, have inspections for exposed wiring in the attic and mold. Include a termite inspection.
  • Ask for a complete list of all work done with receipts for the job. 
  • 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 arise during the inspection, you may change your mind about the house or negotiate for repairs or closing credits, depending on your agent's advice.


Not all flipped homes are money pits. Prescott has many homes to offer, and some have been recently renovated; some are simply beautiful. But as a trusted real estate advisor, I like to be sure my clients don't get burned! Let me use my years of experience and help you look for your next home. Contact us today at (928) 458-7865.