Buying a Renovated Denver Home: Permits, Flips and Inspections

A renovated Denver home is worth what the work behind the finishes is worth, and the finishes hide it. Before writing an offer, pull the permit history from the city or county, find out whether the home is a flip, and order the inspections that look past new drywall: the sewer scope, the electrical panel, the roof, the radon test. The Colorado contract gives a buyer the deadlines to do all of it after the offer is accepted; this post covers what to do with them.

Pull the permit history first

Every metro jurisdiction posts permits online. Denver Community Planning and Development has a property search by address that lists every permit, its status and whether it passed final inspection. Jefferson County, Arapahoe County, Adams County and Douglas County run the same search for unincorporated areas, and Aurora, Lakewood, Arvada, Littleton and Westminster run their own. The search takes five minutes and costs nothing.

• Work that needs a permit in the metro: new electrical circuits and panel changes, moved or added plumbing, water heaters and furnaces, structural changes including removed walls, basement finishes, decks over 30 inches, roofs, windows in new openings, and any addition.
• Work that does not: paint, flooring, cabinets in the same footprint, counters, fixtures swapped on existing plumbing, and tile.
• What to match: the listing says "new kitchen, finished basement, new furnace." The permit search shows a furnace permit and nothing else. That gap is the first question for the seller's agent.

A permit that was pulled but never closed with a final inspection counts as unpermitted. The buyer inherits it: a future sale, an insurance claim or a city complaint brings it up, and a retroactive permit in Denver means opening walls for inspection at the new owner's cost. The Denver home buyer verification checklist puts the permit search in order with the rest of the checks.

How to tell a flip

• Sale history. The county assessor's record shows the last sale date and price. A home bought 4 to 10 months ago for $150,000 to $250,000 less than the current list price is a flip.
• The seller is an LLC. Flippers hold title in a company. An LLC seller fills out the Seller's Property Disclosure with what it knows, which is less than an owner who lived there 20 years.
• The same finish package. Gray luxury vinyl plank, white shaker cabinets, black hardware, a gray-and-white tile shower, and every surface painted the same white, including the basement ceiling and sometimes the outlets.
• New fixtures on old systems. A new faucet on galvanized pipe, a new panel cover on a Federal Pacific panel, new shingles over a sagging deck.

A flip is not a problem by itself. Investors who follow the Denver fix and flip guide pull permits, use licensed trades and scope the sewer, and their homes are better than the dated ones next door. The problem is a flip that spent the budget on the parts the camera sees.

Who did the work

Colorado has no statewide general contractor license, so Denver, Aurora, Lakewood and the counties license contractors locally. Electricians and plumbers are licensed statewide through the Colorado Department of Regulatory Agencies, and a permit for that work names the license holder. Ask the seller for the contractor list, the invoices and the warranties. A reliable whole house renovation team keeps that file and hands it over; a seller who did the work with day labor has nothing to hand over, and the permit search confirms which one it was. Most contractor warranties in Colorado run one year on labor and stay with the original client unless the contract says they transfer, so get the transfer in writing.

Inspection points a fresh paint job hides

A general inspection runs $450 to $700 in the metro and looks at what is visible. On a renovated home, add the specialists that look where the drywall closed.

• Sewer scope, $150 to $300. New floors sit on top of the same 1962 clay lateral. Order it on every home built before 1980, renovated or not.
• Electrical panel. The inspector pulls the cover. A Federal Pacific or Zinsco panel behind a new cover blocks insurance. New circuits without a permit mean nobody checked the connections.
• Plumbing behind new tile. Run every fixture for ten minutes and check the ceiling below. Look under the sinks for the pipe material: PEX or copper is a repipe; gray polybutylene or rusted galvanized is a cosmetic job.
• Roof. New shingles over a hail-damaged deck, or a second layer laid over the first, fail insurance and show up as soft spots. The Colorado roof report for buyers lists what the inspector checks.
• HVAC. Read the serial number on the furnace and air conditioner; a "new HVAC" claim with a 2009 date code is a new thermostat.
• Windows. New vinyl windows set in the old aluminum frames without flashing leak at the first spring storm.
• Grading and drainage. New sod hides a grade that slopes toward the foundation. On expansive bentonite clay across Aurora, southeast Denver and Douglas County, that is a heaved slab in three years.
• Attic and crawlspace. The two places a flip never touches. Insulation depth, moisture staining and the vent for the new bath fan all live there.

The finding a good Denver home inspector post covers who to hire; the ten inspection red flags post ranks what turns up.

Basement finishes and bedrooms

A finished basement is the most common unpermitted item in the metro. Three checks decide whether it counts.

• Egress. Every basement bedroom needs an egress window or door under the building code every metro city adopts. Without one the room is a den on the appraisal, the listing's bedroom count is wrong, and the price built on it is wrong.
• Floating walls. Basement framing on the Front Range sits on a gap above the slab so the slab lifts on bentonite without pushing the wall. A flip that nailed the bottom plate to the slab shows cracked drywall in two springs.
• The permit. A basement finish permit covers framing, electrical, plumbing and insulation inspections. The finished basement guide for Colorado buyers shows what a permitted finish looks like.

Asbestos, lead and radon after a remodel

Homes built before 1980 in the metro hold asbestos in popcorn ceilings, floor tile, duct wrap and drywall compound. The Colorado Department of Public Health and Environment requires an asbestos inspection before disturbing more than 32 square feet in a home, and a scraped popcorn ceiling without that inspection means dust in the ductwork. Ask for the inspection report and the abatement clearance. Pre-1978 homes carry the federal lead paint disclosure, and contractors disturbing painted surfaces follow the EPA renovation rule.

Radon changes after a remodel. A new basement finish, a cut slab for a bathroom drain, or a sealed-up crawlspace all change how the gas moves. Most Front Range counties sit in EPA Zone 1. Order a 48-hour test during the inspection period, $150 to $250, and ask for mitigation ($1,200 to $2,500) when the result is at or above 4 pCi/L. Colorado sellers must provide a radon warning statement and any known test results. The radon and the Denver home purchase post explains the test.

The Colorado contract protections

The Colorado Real Estate Commission's Contract to Buy and Sell Real Estate gives the buyer an inspection objection deadline, an inspection termination deadline, an appraisal deadline and a loan termination deadline. Set the inspection deadlines 10 to 14 days out on a renovated home so the sewer scope, radon test and any specialist have time. A buyer who terminates by the deadline keeps the earnest money. The Seller's Property Disclosure comes before the offer; read it for the words "unknown" on the permit, roof and basement lines, which is how an LLC seller answers. The making an offer on a Colorado home page walks the deadlines in order.

Pricing and the appraisal

Flips list at the top of the updated comps because the investor's margin lives there. The appraiser compares the home to sold updated homes, not to the list price, and in a market with more inventory the appraisal comes in under contract on a share of flips. The appraisal deadline in the contract lets the buyer renegotiate or walk. Being realistic about upkeep, comfort, and cost matters more on a renovated home than a new one: the finishes are new, the roof, sewer, furnace and windows are whatever the permit search says they are, and the price needs to reflect that mix.

Financing a renovated home

FHA will not insure a loan on a home resold within 90 days of the seller's purchase, and a resale between 91 and 180 days at more than double the prior price requires a second appraisal. Conventional loans have no flip rule but the appraiser still reviews the prior sale. Mike Oswald, VP of Mortgage Lending at Rate, NMLS 261003, Equal Housing Lender, checks the sale history against the loan type before the offer goes in, so a Colorado buyer does not write on a flip the loan cannot close. You are free to use any lender. The Colorado mortgage pre-approval guide and the Colorado home financing guide cover the steps.

What looks new versus what to verify

Buy renovated or renovate it yourself

A permitted, well-documented renovation is worth paying for: the buyer skips 3 to 6 months of contractors and finances the work at the mortgage rate. A dated home next door at $80,000 to $150,000 less, with the work done on the buyer's terms, wins when the buyer has the cash or a renovation loan and the time. Research on housing and health published through the National Library of Medicine treats buying a renovated home as a health decision as much as a financial one: ventilation, moisture control and the materials behind the walls decide how the house lives. Buyers weighing the dated version read the 1950s to 1980s Denver home fix list for what that work costs, then compare both on the Denver homes for sale page.

Where to go next

• Search every home for sale in Colorado
• The Colorado Home Buyer's Guide
• How the Kenna Real Estate Group helps buyers
• Denver fix and flip guide: what to check before you buy
• Light, layout and outdoor space: what Denver buyers see first
• Kenna Real Estate Group agents

Talk to the Kenna Real Estate Group

The Kenna Real Estate Group at Keller Williams DTC pulls the permit history and the sale history on every renovated home before a buyer writes, sets the inspection deadlines with room for the sewer scope and radon test, and negotiates the credit when the walls tell a different story than the listing. Call or text 303-955-4220. A live person answers. Not a robot, not a phone tree. Start here: search every home for sale in Colorado.