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Caution on Flips
June 3rd, 2014 1:44 PM

Foreclosures can bring out the worst in people, who sometimes hammer holes in walls, damage pipes and plumbing, and let sinks and tubs overflow while walking out the door.  A new buyer may hire a handyman to patch and paint the walls, add new carpeting, and spruce up the house where needed to make it look beautiful with some upgrades.  However, some of the repair and restoration work may require a licensed contractor or even permits to complete.  If not done correctly, it can cause a lot of grief and additional expense to the next buyer, after it is "flipped." 

Parties who flip foreclosed or short-sale properties are not exempt from making disclosures just because they have not lived there, especially if repair or remodeling work has been done.  All sellers are responsible for filling out disclosure forms as accurately and completely as possible. 

Buyers should beware and be educated as to what to ask when thinking of a foreclosure or or short-sale purchase.

What was the property's condition when it went into foreclosure?
Are there receipts from licensed contractors to verify the upgrades?
Is there a list of what was done to correct each defective condition?
Were there defects that were not repaired?
What work was done by a handyman?
Are there any permits available, or what work was done without the permits?

The answers to these questions will assist buyers in making an informed decision and will help to avoid disastrous results in the purchase of the wrong property.  Be sure to scrutinize a quickly remodeled home and know all the facts.  The lower price may not be the "bargain" you were looking for.

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Posted by Barbara Doeringer on June 3rd, 2014 1:44 PMPost a Comment

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