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Buying a Flipped House? 4 Things to Look Out For

Jun 1, 2016 • By Matthew Stock.

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Shiny new appliances, new siding, new cabinets and beautiful new floors, what is there not to love?  The house is in the right location, has the right look and the price is right…time to put in an offer right?  Not so fast, unfortunately there can be a lot of major issues and agony hiding behind those new sparkly finishes.  All too often the excitement of the new house impedes rational decision making which can come back and haunt a new homeowner later.

I will have to admit this posting is a bit of a rant on the house flipping industry.  While just like any industry, there are good house flippers and bad house flippers; the bad ones can really wreak havoc on unsuspecting home buyers, sometimes to the point where a homeowner walks away from the house or lets the bank foreclose on it.  Unfortunately, with the increase in certain television channels promoting the glory of house flipping, the number of unqualified people doing house flipping has gone way up and the number of horrible experiences home buyers have increased along with it. 

In the last few years, we have often times been called out to look at a seepage issue on a newly renovated home only to find out the unscrupulous house flipper had taken great lengths to hide a major structural issue with the foundation.  Unfortunately this is the first time the new owners have been made aware of the issue, and are quite disturbed to learn that these structural repairs cost tens of thousands of dollars to repair and its too late to do anything about it from a real estate transaction perspective.  I can give dozens of examples of unethical work that was done but rather than rant about it, I am going to give potential buyers (hopefully a few home inspectors as well) some tools that can help them identify these issues prior to making an offer or closing on a property.

4 Things to Look for on a Flipped House

1. Permits for the work that was done:

Ask if permits were pulled for the work that was done.  Unless it is painting, wall paper or purely cosmetic work, almost every municipality requires a permit for remodeling work.  Permits are typically avoided so that subpar work can be completed or upgrading deficient or unsafe items can be avoided.  If permits are not pulled when required, this is usually the first sign something substantial can be wrong with the house as village inspections on permitted work help prevent these scenarios.

2. Exterior clues that the foundation has a structural issue:

Leaning foundation walls have a few signs on the exterior that are pretty easy to spot.  Basement windows tend to be severely out of plumb on a wall that is leaning or bowing inwards.  If the first floor wall is siding, there may be an excessive gap between the back of the siding and the foundation wall.  If the wall is brick, the brick may be overhanging the top of the foundation significantly or there may be a horizontal crack in the brick work along the first floor line.  Another sign can be that the beam has cracked the foundation wall causing a large piece of concrete to start bulging out in the area of the beam.

If the foundation wall is settling or sinking the typical signs on the exterior are step cracking in brickwork, brickwork that looks like it has been tuck-pointed recently or multiple times, exterior trim and caulk pulling away from windows and doors, garage overhead doors out of alignment and large cracks in the foundation.

3. Interior Clues that the foundation has a structural issue:

If the basement is finished it makes identifying structural issues a little more difficult but there are signs that can be obvious.

If the foundation wall is leaning or bowing inward, the foundation will have multiple cracks, often times angle cracks at the corners, windows will be out of plumb, drop ceilings may be bowed slightly and drywall may be cracked in areas of stress.  One other trick is if you can find an unfinished area where you can see behind the finished wall and look at the framing of the wall.  If a wall is leaning or bowing inward, you will see an uneven gap between the framing of the finished wall and the foundation wall. 

If the foundation is settling, the signs are again multiple cracks, typically wider at the top than the bottom, cracks in the basement floor that run from foundation crack to foundation crack and cracked footings that can be seen in crawlspaces. 

Foundation settlement also manifests itself in above grade spaces as well.  Sticking windows and doors, doors that don’t stay open and close seemingly by themselves, floors that are out of level and drywall damage in walls and ceilings.

4. Signs of seepage:

Seepage is a tricky thing because unless you are in the basement or crawlspace during a heavy rain, it is hard to witness it first hand.  There are some signs that can point to previous seepage issues that should be discussed.  The main signs can be the following; wood for the basement stairs and basement wall framing looks discolored or darker where it meets the concrete floor, you can see a distinct drywall seem in the basement finished walls about 2 feet off the floor, the lumber had been painted white, cracks in the foundation that have been patched with hydraulic cement, and/or a patch of concrete around the exterior perimeter of the basement floor indicating a drain tile system was installed.

Now if any of these signs are there, does that mean the prospective buyer should immediately walk away from the purchase?  Certainly not, as it was pointed out earlier, there are great house flippers that do the right thing and take care of these issues when they arise.  The goal of these four points was to provide some tools to help avoid a catastrophe later and to have an active discussion about what the issues are on a particular home and if they have been properly addressed in the renovation.  An ethical house flipper will welcome the discussion and ensure that the repairs were done correctly, substantiating the repairs with permits, engineering drawings and/or a contract from a professional foundation repair company.

Another avenue that can be pursued is that if you suspect an issue may be present, the house flipper is unaware or is insistent that nothing is wrong; ask that a licensed structural engineer or a foundation repair professional be consulted for an inspection and foundation evaluation. 

If you are looking at buying a renovated home and think there might be foundation or seepage issues, contact us.  Here at U.S. Waterproofing, our Advisors have the experience to help with even the most difficult structural and seepage situations.

Tags: basement waterproofing facts, structural foundation damage, structural foundation repair, foundation cracks, foundation damage, home foundation repair, foundation waterproofing, house foundation repair

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