Purchasing a home that has been "flipped"

When buying a home that has recently been "flipped" (meaning that an investor has purchased it to renovate it and place it back on the market in a short period of time for a profit), please keep in mind that you should have your agent look up the date that the property was last sold and how the investor purchased it.  If the investor bought the home using an FHA Loan, then there could be conditions that prevent the seller from selling the house within a certain time frame.  (Currently, the rule of thumb is 90 days but of course things change, so check with your local lender for more up to date information as time goes by.)  Most folks think that the 90 day rule is for settlement only.  But its not.  It means that the seller cannot even get a contract on the home until 91 days after the home was last purchased. 

So here's the deal...if you have a buyer interested in one of these homes and you find that you have written the contract prior to the 91 days, check with the lender to see if it would fall under the waiver criteria that is currently in place.  The lender may require a long list of things like - a second appraisal, a cma, a copy of the listing, a copy of the home inspection report, a copy of the deed when the seller purchased the home, and the list goes on.  And even though you may have to delay closing and jump through a few hoops like a circus clown, at least it wouldnt be a total loss and your buyer could still buy the home they fell in love with!