Buyer Beware! Home Buying Advice for New Construction Homes!


🤫 What local house-flippers DON’T want buyers to know…
…and the critical questions to ask BEFORE buying a house remodeled by a real estate investor.
Buying a home that was extensively remodeled by a house-flipper can be risky.
👍 Today, I’m sharing the questions buyers should ask, but rarely do.
These pointers will help you avoid years of regret and financial losses.
Hi, it’s Eva Lin, Broker-Owner at Lin Realty Group here in Pasadena.
I’ve been seeing more and more investor-remodeled homes selling for shockingly high prices around town.
This makes me VERY worried for local home buyers, and here’s why…
💰 An investor's sole objective is to make as much money as quickly as possible (before the market turns).
So, many investors/flippers hire low-bid, low quality contractors.
AND they push them to cut corners for the sake of speed and cost.
The materials and finishes used might look nice, but they tend to be flimsy and cheap upon closer inspection.
Most home buyers simply don’t know the difference, and why should they?
They’re doctors, lawyers, sales execs, business owners, etc…
…not experts on homes or construction quality.
When a house looks beautiful in the online photos, many buyers assume the high asking price is a reflection of quality.
⚠ That assumption is often miles away from the truth.
Don’t get me wrong.
Some local investors have earned a reputation for building quality homes.
BUT, as house prices continue to climb year after year, fly-by-night investors are jumping into the market.
😳 This is where things get concerning.
The last thing I'd want is for a homebuyer to buy a house that looks beautiful on the outside…
…but is actually a ticking time bomb of construction defects hiding beneath the surface.
Home buyers are at a real disadvantage here.
The sad truth is most agents don’t know the right questions to ask.
🤷 They don’t know how to dig deep on the quality of a remodel…
And even if they do, there’s no incentive for them to go the extra mile and look for hidden problems!
Many think, “Why stir the pot when my client has fallen in love with a home?”
Regardless of financial incentives, I believe in treating clients the way I would treat my own family.
💪 That’s why I advise my buyers to take these uncommonly aggressive steps when considering a flipped house:
1⃣ Ask the seller to provide the name and license info for the general contractor (“GC”).
🔎 Have an attorney run a search for closed or pending litigation against that contractor for construction defects.
Also, check to see how long the contractor has been licensed.
Ideally, they’ve been active for many years with little to no litigation.
If not, you can consider that red flag #1.
2⃣ Ask for the names and license info of all the major subcontractors who worked on the home.
e.g. electrical, plumbing, roofing, concrete, dry wall, etc.
If the seller tells you the GC is the one who did all the work normally done by specialty subcontractors, you can consider that red flag #2.
Of course, I advise a general inspection and specialty inspections.
While helpful, the inspectors can only learn so much about the underlying quality of the home’s build.
They can’t tear down drywall and look inside of the walls.
3⃣ I recommend hiring an experienced GC as a consultant to review both the architectural and structural design plans.
Also, have them on-site to investigate the property at the same time as the general inspector.
✅ This will give you a much better picture of the build quality.
If everything to this point seems satisfactory, there’s one more step I highly advise…
…and this is the MOST important of all.
4⃣ Require the seller to provide the name of the insurance company and policy number for the general contractor and every subcontractor.
Here’s why that’s so important:
If poor workmanship causes damage to the property, in California, the contractor’s insurance carrier is liable for the cost of repairs for ten years.
Imagine if your roof starts to leak years down the line.
You’ll definitely want to know who the roofer was and what insurance they carried.
😭 If you don’t have this information, it could cost you dearly.
And that’s just one of a hundred things that could go wrong due to poor construction quality.
If you’d like further guidance on how to protect yourself when purchasing a home, whether a flip or otherwise, please feel free to reach out.
You can find me at 626-807-6581 or at linrealtygroup.com
Eva Lin | Broker | Lin Realty Group
DRE01817694 | DRE02097017


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