The real estate market is so hot people are forgoing home inspections to get their bid accepted, but that rush to buy can cause trouble.
Flipped homes are at an all-time high. These are properties that are bought, renovated and sold within a matter of months and while they can be money makers for sellers, there are potential pitfalls for buyers. One Massachusetts woman says she learned that the hard way.
Barbara Dainoff bought a flipped house last summer, and she says the rotten wood is the least of her problems.
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“I liked the house, but little did I know what would transpire,” said Dainoff.
The Leominster property was marketed as a tastefully renovated and updated three bedroom ranch. Barbara says it looked lovely at first.
“What I’ve since discovered, particularly as time has gone on, is that everything is wrong,” said Dainoff. “I have doors that were incorrectly installed, incorrectly sized, thresholds that were too high, a trip hazard twice as high as code allows.”
She also had a flooded basement and called in a contractor.
“He had removed the molding around the bulkhead door, and what we found was that the door was literally sitting in a hole. It wasn’t installed,” explained Dainoff.
Dainoff says there are problems with the electrical system. The new roof was shingled incorrectly. The sump pump drain emptied next to the foundation.
Inside, she says the floorboards are separating. There were plumbing issues and cracks in the tile. She says the biggest problem was the new HVAC system, which wasn’t hooked up. One of the vents was an open hole into the basement.
“The furnace vented below the snow line, which means that if there was snow that covered it, then CO2 infiltrates the house and people could die,” said Dainoff.
A certificate of occupancy was issued by the city before the sale of the house. Building Commissioner, Peter Niall tells NBC10 Boston that he signed off on the items listed on the work permit pulled for the renovation – the new bath, kitchen cabinets and roof. But, he didn’t inspect the HVAC system at that time, because he says an internal clerical error was made on the work permit, and it failed to list the HVAC system. Niall says Dainoff refused the city’s help in getting the contractors back to correct the problems. Dainoff vehemently denies that.
Dainoff did have a home inspection before she purchased the property. Although a number of problems were found and addressed at that time, she says many of the issues weren’t apparent until after she moved in.
“I’m out about 24 thousand for the repairs and I think we are looking for another 25 going forward,” said Dainoff.
Real estate broker, Rich Rosa, who was not involved with the sale of this property, has seen a lot of flips.
“Home inspectors do their best and the good ones are really good and see a lot of things, but you can’t see everything,” said Rosa.
He advises his clients to ask a lot of specific questions if they are interested in a flip.
Dig deep, take your time, look at it, don’t waive the home inspection. That’s the best way to protect yourself,” said Rosa. “Make sure you go to city hall or town hall. Make sure permits were pulled, make sure permits were signed off on,” said Rosa.
He says if the finish work is done poorly, that’s a red flag.
“If they’re not doing the simple stuff, they are probably not doing a good job on the more important stuff,” said Rosa.
Dainoff has contacted the Attorney General’s office. She has filed a complaint with the City against the Building Department and the Building Commissioner. She is hoping to settle the matter with the seller and recoup her money before the situation ends up in court.
“It’s in the hands of the attorneys now,” said Dainoff. “I hope he does the right thing. And I still hope that the other families that are in his flips are safe and that their homes are better than this one.”
The State’s Office of Consumer Affairs and Business Regulation offers these additional tips if you’re buying a flip:
Check the seller’s or contractor’s record. Have they flipped other homes? Ask for references and speak to those buyers. Also, ask for a detailed list of the changes made to the home, and check to see if the proper permits were obtained and closed.