THE RISK OF BUYING A RESALE HOME: TIME, MONEY & SAFETY

April 10, 2024 | Uncategorized

You’re looking at buying a new home in Evansville IN, which could be brand new construction or an existing home. While it might seem like the used home is more affordable, you need to consider all the factors. Look at the risk of buying a resale home, in terms of time, money, and safety.

When flippers flop

Over the past decade, a growing number of people have found passion and profit in buying a home, renovating it, and reselling—otherwise known as “flipping”.

It’s exciting to walk into a home that feels refreshed. The kitchen has new cabinets, countertops, and appliances. The floors have obviously been redone. The bathroom vanities and lighting have been updated.

But here’s what you need to know. Not every flipper does a great job at renovating a home. Some will cut corners to get the house ready to sell as quickly as possible. They don’t take enough care in the details, the selection of quality materials, and or even adhering to permitting and zoning restrictions.

Look closely at the finishing details of the renovations. Do the corners of the trim match up? Are the doors hung properly? Is the tile level, even, and carefully grouted? Was the paint applied neatly? And were the walls prepped before painting or can you see holes, cracks, and marks that are barely covered? Are the floors level? Do they creak when you walk on them? Are there patched cracks in the foundation?

These details might seem minor but they signal more significant shortcuts that could cost you later. You should wonder about the sloppy or poor quality fixes that you can’t see. Electrical and plumbing repairs are behind the walls so can you trust that these systems are sturdy, updated, and safe?. Take a look at the electrical box. Does it still have fuses instead of circuit breakers?

Any or all of these are clear signs that the flipper flopped on this house!

How do you know if the house is a flip?

Flipping homes became a popular trend during the pandemic as people bought distressed homes when interest rates were low and there wasn’t a bidding war for such challenging properties. With the rise in home values, flipping presented an opportunity to make good profits.

The trend continued after the restrictions subsided. In the beginning of 2022, flips accounted for almost one out of every ten home sales, a 20-year record high.

How can you tell if the home you’re interested in has been flipped? The easiest answer is to check the property records for the sale history. If the home has been purchased within the last year or so, it’s likely a flip. If you can find photos from the previous listing, compare them to the current photos to see what has been changed.

If the person doing the flip is more concerned about maximizing profit than doing the job right, you could be setting yourself up for buyer’s remorse.

The safety risks in a resale home

A home for sale near Evansville IN that has been owned for just a short time isn’t the only situation that should cause you to shop carefully. A longtime homeowner might not have taken great care of their property over the years. Perhaps once they decided to sell, they fixed some of the obvious problems. But then you’re in the same situation as a house flipper: They are more invested in selling the home quickly than making quality updates and repairs.

A good home inspection should provide insight into most problems, particularly if your inspector is thorough. Before you even make an offer that would lead to a home inspection, try a few simple tests to check on the home’s quality and maintenance.

Turn the heat or air conditioning off and on. A well functioning HVAC system responds quickly. Otherwise, you might hear some rattling or delay, the sign that it needs service or replacement.
Look closely for cracks in the exterior walls or foundation. Even small cracks could be a sign of a structural problem. A horizontal crack results from soil pressure against the foundation, which could be a serious risk.
Check for signs of water damage in ceilings, walls, and floors. Water that leaks from the roof or plumbing can absorb into surfaces and lead to mold, a major hazard as well as a major expense to mitigate!
Check vents to see if they have been cleaned and also look for any that are blocked by furniture. That’s a sign that the homeowner isn’t paying close attention to maintenance and safety.
Ask how often the gutters are cleaned. It should be done twice a year. Clogged gutters cause water to seep into the home and cause damage.
Open and close the windows and doors and check the weatherstripping around the exterior ones. They should move easily and be perfectly aligned (no sticking or gaps) with undamaged draft protection. A quick fix could be a homeowner who has painted the windows to look good but they are now painted shut, the result of someone making a hasty repair.

Do these quick checks to save yourself the time and trouble of entering an offer on a house—as well as the cost of the home inspection—that you shouldn’t even consider in the first place!

Know the total cost of ownership

Buying a resale home isn’t necessarily a bad choice. Before you buy any home, you should understand the total cost of ownership. It’s more than the purchase price, which is just the beginning. When you’re making a major purchase that will impact your life (especially your budget) for years to come, learn what you will need to pay to maintain your investment.

One recent study reported that, of 1,000 homeowners surveyed, 52% were surprised by the true cost of owning a home. More than 70% of them said they had buyer’s remorse, with regrets that included too much maintenance, lack of features, and hidden costs.

Calculate the cost to make and keep the home the way you want it.

Are you going to need to pay for major repairs, like replacing the roof or HVAC?
Do you plan to remodel any rooms or spaces? What is the estimated cost for those changes?
Is the home energy efficient? What will you be paying for utilities on a monthly basis?
Will you have to replace appliances or flooring?
Are the outdoor living spaces in good shape or will they need repair?
Is there an HOA fee?

Estimate all the costs you’ll incur when living in the home and you’ll have a good view of the total cost of ownership. Then you have an apples-to-apples comparison of the homes you’re considering.

Is buying a new home a better value than a resale?

Now that you understand the total cost of ownership, compare the cost of buying a new home with a resale.

The builder’s warranty covers everything, from foundation to roof—the structure and systems as well as the interior. All of your appliances are protected by the manufacturer’s warranty. Nothing needs repair or replacement.
Because everything is brand new, you don’t have the cost of remodeling. The home is truly move-in ready.
Energy efficiency is built into most new homes. From low-flow plumbing fixtures to better insulation and energy efficient electrical features, these homes can present considerable savings in the monthly utility bills.

When you add up the cost of transforming a resale home to your liking, does it offer better value than buying a new construction home?

New homes for sale near Evansville, IN.

Thompson Homes does more than build communities of new homes for sale near Evansville IN. We design our single-family homes and townhomes to fit the way people want to live, now and into the future. Our homes feature the latest in construction practices and materials, giving your home a solid structure that’s energy efficient, safe, and provides lasting quality.

Then we add details that make your home a more convenient, comfortable, and safe fit to your lifestyle. Our homes reflect the latest in energy efficiency, indoor air quality, and home automation options.

While you’re preparing to buy a home, take the time to understand all the details that contribute to your cost, not just the purchase price. If you’re shopping for new homes for sale near Evansville, IN, please look at Thompson Homes’ many options. You can choose one of our quick move-in homes in desirable Evansville suburbs, like Centerra Ridge, Summerlyn Trail, or Creekside Meadows. Or talk to us about building your home, with so many choices of floor plans and spacious homesites! Thompson Homes takes pride in offering a variety of new homes that fit your lifestyle and budget. Contact us to explore the lasting value, affordability, convenience, and peace of mind that comes with buying a new home from a builder who is committed to your complete satisfaction.