Your clients have just fallen in love with a “Pinterest-worthy” house, but you know it’s a flip. How can you tell if it’s a quality remodel or a money pit waiting to swallow your buyers?
Last year, I attended Spring training in Scottsdale and stayed in a Pinterest-ready house that we had rented for the trip. The pictures online were amazing, and when you walked in, the house looked great. The top-of-the-line Ikea kitchen was on trend as was the remodeled master bedroom suite. What could possibly be wrong?
The answer was “plenty.” The flippers had painted over a hideous yellow brick, and the paint was already peeling. They had also painted the concrete surrounding the pool deck to minimize how bad the cracking was.
What was even more disturbing was the smell of mold in the secondary bath. To have mold in a place where the typical humidity is 6 percent to 12 percent, there has to be a serious moisture problem somewhere.
I felt really bad for the young owner who had purchased this problem-farm as his first rental, especially when I learned there had been multiple offers, and he had waived the inspection.
Finding what’s lurking under Pinterest-ready
I recently interviewed Dylan Chalk of Orca Home Inspections in Seattle, Washington who is also the author of The Confident House Hunter. Chalk provides concrete strategies for helping buyers and agents spot “red flags” that often signal poor workmanship and costly repairs ahead.
Chalk’s goal is to inform buyers and their agents how worried they should be about the condition of a property. To do this, he created a systematic approach to identifying the red flags that signal serious issues.
Maintenance vs. true dysfunction
The goal of any home inspection is to help the buyer distinguish between the necessary maintenance items to keep the house functioning normally versus true dysfunction that needs to be addressed. To make this determination, Chalk divides the systems in the house into three categories.
1. Disposable systems
“Disposable” systems include the roof, appliances, heaters, toilets — anything that will typically have to be replaced during the course of normal ownership of the property.
Although you may not think of a roof being disposable, a composition roof has a life expectancy of 15-20 years. Moreover, replacing it can often be done in a less than a day.
2. Entrenched systems
These systems are much harder to change and include the pipes, windows and wiring.
3. Core systems
When someone asks, “Does the house have good bones?” they’re asking about the core systems. Problems with core systems are difficult and expensive to address and include the structure, the framing and how the house is situated on the site.
Learning how to evaluate the risks on a site is important for both agents and their clients. Although you never want to diagnose these issues as an agent (that brown spot on the ceiling could be a bee hive leaking honey, not a water stain), it’s important to be alert for red flags that may indicate a problem.
- Are there trees near the house that could damage the house during a storm?
- Does the property sit below other surrounding properties making it at risk for drainage problems?
- Is there a downslope or hill on the property that requires a geologist or soils engineer to evaluate whether or not there is the potential for a serious problem?
Because these types of issues cannot be remedied in many cases, buyers need to do thorough inspections and educate themselves as to risks associated with owning this type of property.
Want a great house? Look for a beautiful roofline
When you first walk up to a property, Chalk advises that you look at the roofline first. Quirky rooflines usually mean a strange house on the inside.
Part of the reason we have so many boxy, ugly homes is that many architects design the floor plan first. The best architects design for a beautiful roofline, which usually means a beautiful house.
How to spot cover-ups and poor workmanship
What are the telltale signs that a flipper didn’t use great subs or pros to do the work on that Pinterest-ready house? Some signs to watch for include:
- Barcodes on the plumbing fixtures, which indicate the fixtures were purchased at a big box warehouse store. Professional plumbers purchase through a plumbing supply company and supplies do not have barcodes.
- Does the street have a name like Coldwater Canyon or is the area known as Crystal Springs? If so, there may be water, drainage or flooding problems in that location.
- Look carefully at the tile and the woodwork. Is everything perfect, or are the mismatches that indicate an amateur or poor-quality contractor?
- Does the house smell musty or moldy, or did you start sneezing when you walked into the property? Make sure your inspector looks for leaks and mold in the walls that may have been covered by that new coat of paint.
Why new homes pose a greater risk than homes that are 20-30 years old
Buyers often feel there is no need to do a home inspection of a new house. That’s a huge mistake. A typical home has thousands of components and as many as 200-300 people may touch the construction process over the nine to 12 months it takes to build the home.
Furthermore, Chalk explains that “built-to-code” really means “built to the bare minimum standard.” In truth, newest homes pose the greatest risk, especially as compared to a home that is 20-30 years old, and there is a clear track record on how the home and the property have performed.
The smart move is to never waive the home inspection. Buyers need to know what they’re buying and the risks that come along with their purchase, especially when the house is new.
Without that inspection, there’s no way to know if that Pinterest ready house is really a money pit in disguise.
Bernice Ross, President and CEO of BrokerageUP (brokerageup.com) and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.