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Foreclosures and Short Sales - Make sure you have the utilites turned on for vacant properties!

By
Real Estate Broker/Owner with Metro Life Homes RS-78439 / BRE #01708344

With FHA loans being so sensitive to conditions, restrictions, guidelines and timeframes, you do not want your deal to fall out due to delays related to problems with the physical inspection.

If your buyer's inspector cannot test the water, gas and electricity on your FHA deal, they will have to to a re-inspect with the utilities on at a future date.

This cause your buyers to have to pay for a re-inspection.  I guarantee they will not appreciate that the least, and it will inject frustration into your escrow at that point, which is NEVER a good thing.

Plus it will create a bump in your FHA loan approval procedure and since they are so sensitive these days anyways, you're inviting disaster.

As soon as you get into escrow, GET THOSE UTILITIES TURNED ON if they are not already.  If you're seller has any worries about it, you can always shut the main water valve off until the inspector gets there.  He/She will know enough to check the main valved and turn it on.

If you're representing the buyer, you may want to check with their inspection company, as some of them now have to ability to get the utilities turned on for their inspection themselves.

IT JUST TAKES A FEW MINUTES FOR YOUR SELLER OR WHOMEVER HAS THE AUTHORITY FOR THE PROPERTY TO TURN ON THE UTILITIES.

Make it one of your listing checklist points!!!

Comments(6)

Bill Ladewig
LoanOfficerSchool.com - Escondido, CA
Experience Is Your Advantage

Ralph, excellent advice!!!  I cannot tell you how many loans have been delayed because the appraiser had to go back after the utilities were on.

And, with music...

Jul 28, 2009 11:34 AM
Linda K. Mayer
License # 01767321 - La Verne, CA
Realtor, SRES, SoCAL, A REALTOR YOU CAN TRUST

Great advice... but the banks up until this point aren't going for it on foreclosures.

Jul 28, 2009 12:57 PM
Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes

The banks are not turning on utilities -- if buyers need them on then they have to turn the utilities on themselves in their own names before they own the home. Just the state of affairs with the banks it seems.

Jul 28, 2009 04:54 PM
Ralph Gorgoglione
Metro Life Homes - Palm Springs, CA
California and Hawaii Real Estate (310) 497-9407

Linda / Bob / Carolin,

The last 3 bank-owned escrows I had, the bank turned on the utilities for the inspection.

Jul 28, 2009 05:10 PM
Anne Hensel
South Beaches Real Estate Professionals - Saint Petersburg, FL
Realtor - Broker - St. Pete Beach, Treasure Island

When I am on the selling site of a short sale or bank owned property I write it in the contract that utilities HAVE to be on and I drive the poor listing agent so crazy that on all of my bank owned and short sale  I had electic and water turned on.

Aug 02, 2009 03:12 AM
Richard Ruggaber
Metro Life Homes - Los Angeles, CA
California Real Estate - (818) 422-5035

Very true.

I had this happen to me during one of my escrow and it caused a huge delay and almost caused a cancellation.

Sep 19, 2009 05:12 AM