Tomorrow, I am showing property to a Buyer...yippeee!

When I was scheduling the showings for my Buyer this evening, I noticed that they all had something in common...all three of t hem were "short sales" and the price and commissions were to be approved by the bank.

O.K....I can handle that, as that's a pretty customary thing to find listed in MLS these days...

One thing that I thought was quite unique though was the fact that one out of the three listings I am showing tomorrow state in the Realtor Remarks that is is the "Buyer's responsibility to turn on the utilities as needed for inspections."

In the event that my Buyer does like this home, I am not comfortable with him being responsible for paying any required fees to turn on the utilities for this home so that he can have inspections...

What do you think? Do you think it is appropriate to ask the Buyer to pay to have the utilities turned on to have inspections? I've never heard of such a thing and am curious if any of you have faced similar issues and if so, how you've handled it when writing your offer.

Looking forward to your feedback so that I can be best prepared tomorrow!

 

Direct: (321) 377-0157, LaShawn@YourHomeOurPriority.com Certified Distressed Property Expert (CDPE), Accredited Luxury Home Specialist (ALHS)  & THREE-YEAR Five Star "Best In Client Satisfaction" Award Winner! Click HERE to visit MY WEBSITE!  

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Post is included in group: RE/MAX Active Rain Bloggers

85 Comments on Should the Buyer be responsible to turn on the power & water for utilities?

20 Most Recent Comments Displayed Show All

APR
24
2008
 For what it is worth, my utility companies in Bastrop only allow the owner or listing agent to turn on utilities.  The buyer can't get them turned on until after closing and they have to show a settlement statement, the listing agent has to show a listing agreement, or the owner has to do it themselves.
10:05pm • #67

What are you griping about? These are REO properties; if the utilities are off, then price the offer accordingly.

The buyers I work with like ranch style homes, so there's no second-story plumbing to worry about.
lemstem
10:57pm • #68
I would think the seller would want to cooperate with the buyer to help get the house sold. As a buyers agent there might be an exception if they absolutely fell in love with the house and they are willing too pay for the necessary means to get the house. With as many homes on the market as there are though I would think there would be a house or two with a very motivated and helpful seller. Good Luck showing and hope this may help.
11:01pm • #69
3 Featured Posts Localism Sponsor
Well, it doesn't seem "right," but there are a TON of tire kickers out there.  A seller has all but abandoned a house when selling short in many cases.  The listing agent is going to take perhaps a 30% cut in the commission...and will likely work 4 times as hard and only close half of the listings.  So it shouldn't be the listing agent's responsibility, either.  Tough situation.  I do believe though, that if the buyer is genuinely interested in the house, it should be an issue that can be overcome.
11:54pm • #70
APR
25
2008
240,429 Points 2 Featured Posts Outside Blog Attended Rain Camp

Normally this is the order that it would happen (the would get just Temporary power for the day of the Inspections ONLY).

  1. Seller
  2. Listing Agent
  3. Buyers Agent
  4. Buyer (if they really want this property and it needs power in advance for any reason).

Nothing surprises me these days anymore!
1:58am • #71
952,988 Points 93 Featured Posts Outside Blog Called Shot Master
It is a buyers choice!  Just do it!  It may be hte best spent money the buyers will ever spend!
9:19am • #72
2 Featured Posts Localism Sponsor

If they really want the house they need to ask BEFORE making an offer:

1) what is my liability for turning on utilities for a property I don't own?

2) what are the fees associated with turning on utilities?

3) what are the past due bills for utilities?

4) is it worth it?

5) is this the house I want considering 1-4 above?

If so, do it.
10:47am • #73
519,684 Points 111 Featured Posts Outside Blog Attended Rain Camp Called Shot Master
In our contract it specifically states that the utilities need to be on for all inspections and remain on till closing.  In our humid climate, mold and other issues can come up with no AC running
11:10am • #74
I don't know much about short sale but I have noticed that many REO properties in this area require the buyer to be responsible for utilities as well. (The banks do not want to take much responsibility for anything.) It seems that the buyers agents are fronting the costs and then being reimbursed through the bank at the close of escrow (provided that it closes). Keep in mind that at least in CA, when the gas company comes out they will need to get into the property and turn off all gas appliances BEFORE they will turn on the gas (Due to obvious safety reasons) so someone MUST meet them at the property and allow them access.
4:15pm • #75
254,733 Points 2 Featured Posts Outside Blog
Just got a first listing from a bulk REO buyer. So I did write it into the listing agreement that the seller will agree to turn on the utilties at their cost for any buyer inspections. Been there and seen that one before and it is not fun to argue over this, which should be working in the first place.
5:05pm • #76
APR
27
2008
229,420 Points 10 Featured Posts Outside Blog Hit Router

CONGRATULATIONS LA$HAWN - YOUR FIRST FEATURED POST (and I know there are more to come)!  What a timely topic and some outstanding responses.  Wow, this is a sensitive situation with liability issues galore.  I believe that the seller is responsible (even if it is a bank) to make the house available for a buyer to inspect and have the utilities on.  I'm sorry, it is not the buyer's responsibility regardless of how good of a deal they might be getting.
9:58pm • #77
APR
29
2008

LaShawn, From what I have seen in our marketplace,  the listing agents for the REO's have been responsible for getting the electric and water turned on when a property is listed. I have an agent who currently has over $7,000 of his own money invested in lawn care, keys and locks and electric and water bills. This is the cost of doing business. They submit the bills monthly and are reimbursed. In fact the listing agent is REQUIRED by some of the banks to put the electric and water on as a condition to getting the listing! Something doesn't sound right if they are telling you it is up to the buyer or the buyers agent!
9:55pm • #78
MAY
06
2008
I am thinking of buying my grandparents old house but I know that the water service has been cut-off. To reapply (and become a member to receive water service), the fee is $800! I know that the sellers (my aunts) will not shell out any money to get it turned on. I don't know if I am willing to spent that much money on a house that I might not buy.
8:53am • #79
I am thinking of buying my grandparents old house but I know that the water service has been cut-off. To reapply (and become a member to receive water service), the fee is $800! I know that the sellers (my aunts) will not shell out any money to get it turned on. I don't know if I am willing to spent that much money on a house that I might not buy.
8:53am • #80
269,968 Points 15 Featured Posts Localism Sponsor Outside Blog Called Shot Master
Hello. I deal with this situation a lot and I tell my buyer's that it is their choice but I think it should be the buyer that takes on the cost. The seller can't turn it on 20 times or however many times until a buyer buys it.  If the buyer wants a inspection and a good inspection, they should take on the responsibility.
9:26am • #81
APR
29
2009

Hi I'd just like to comment.I am a buyer paying cash for a shortsale which is suppose to close tommorrow.In my case power and water were turned off and needed to be turned on for inspection.In my case the water dept requested that the realtor submit proof that it was for a inspection and the water was turned on no charge for one day.I paid to have electric turned on.

Now get this,there is a $1600 water bill pass due on the property.The water dept will not turn it on under a new account for the new owner (potentially me) until the balance is paid off.The bill did show up on the title abstract but the bank is playing games now saying the owner (the people loosing the house) are responsible for paying the bill.LOL they aren't going to pay it they lost the house...

So the bank and sellers agent are beating around the bush about this water bill,and I'm not going to buy the house until the bill is paid.I am buying as is,but that doesn't mean assuming someone's $1600 water bill.I can't believe this is happening.

Thoughts?

 

 
lionking
3:57pm • #82
9 Featured Posts Outside Blog Attended Rain Camp

Hi,

As a Buyer's Agent, I must first apologize to you for the craziness that you are facing. This real estate market is hurting for buyers and yet when there is one, things like this become road blocks! While I am no attorney, I would say that yes, the current owners are responsible for the utility bills...but if they aren't paying the mortgage, they aren't going to pay a $1600 water bill...which means that the seller's lender needs to pay it in order for their to be clear title so that you can purchase.

If I were you, I'd refuse to pay it too...if the bank wants to proceed with the foreclosure, they will have to hire an attorney and go through the entire foreclosure process, which will cost them at least $50k...only to still be responsible in the end for the utility bill.

Yikes...what a mess. I feel for you.

I'd love to know what the final outcome is...please stop back by when it's resolved and let me know how it was handled.

Best of luck to you!
10:34pm • #83
JAN
18
2011

i think its wrong to exect the buyer to pay for the ultilitys. the listing agent should be the one to pay for them. i feel very strongly about this.as im in a situation where im waiting to do my home inspection and the listing agent wont turn on ultilitys for the inspector. im suspecting a back owed bill but no one is telling me anything except i have to reschedule my inspection againg due to ultilitys not being turned on by listing agent.ive been trying for three weeks to get my inspection.either theres a problem or i have the worlds lazyest listing agent. either way buyers should not be left in the dark about whats going on. pay the darn bill or at very least let the buyer be aware of whats happening,and dont leave the buyer in the dark about whats going on like ive been.i suppose im going to have to go to the broker to find out the problem.this should be taken care of so buyers dont have problems like this in the first place.
Lynnette
8:31am • #84
NOV
28
2011

In most cases the home has been sitting vacant for months with no guarantee it will sell so I can understand why a Seller in financial trouble, and can't pay their own utilities, wouldn't want to pay to maintain utilities in a vacant home. I think a serious Buyer would understand that paying less than $100 to start utility service is part of their closing costs.

In my opinion the listing agent has no responsibility at all to provide utilities for a Buyer that wants to do an inspection to protect their own interest.

A pre-inspection of the plumbing and electrical components when deciding to make an offer can be done without utility service. The full inspection can take place near the end of the transaction usually within 2 weeks of closing. Why wouldn’t the Buyer just turn on the utilities and leave them on instead of having two turn ons and a disconnect if the Seller has to get involved?  Not cost effective.  Once again, in my opinion, the Buyer needs to have the expectation up front, that if and when they get a short sale approval, they need to be ready to turn on and leave on (turn off at main disconnects for safety) the utilities do their inspection, and decide if they are going to accept the home or not.
Dwight McDonald
11:21am • #85
DEC
04
2011
9 Featured Posts Outside Blog Attended Rain Camp

Dwight,

My post was written more than 3 years ago, when it wasn't as common for Buyers to absorb the responsibility and the cost of restoring utilities. In today's times, it's not only more accepted, it's often the only way to get a contract to move forward. I would, however, highly recommend that agent's and the Buyer's they represent get a Hold Harmless agreement signed by the Seller in the event there is a flood, fire or some other issue that arises as a result of the utilities being turned back on!

And I agree, inspections upfront are helpful to not only determine if the Buyer wants to proceed with the sale, but also to help shape an offer based on the findings of the inspection results. If the home requires repairs not readiy obserable, the offer can be structured with a 203K/renovation loan or the offer price can be reflective of what's needed.

 

 
9:37pm • #86

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Lashawn Rainmaker_large

LaShawn Norden, REALTOR, (321) 377-0157 Your Real Estate Advocate in Central FL

Longwood, FL

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Keller Williams Heritage Realty

Address: 1150 Douglas Avenue, Suite 2020, Altamonte Springs, FL, 32714

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Selling or purchasing a home can be exciting and scary at the same time! The goal of my blog is to educate Central Florida Buyers & Sellers about the Good, the Bad & the Ugly things that can happen in a real estate transaction! As an advocate for consumers in Orange, Seminole and Volusia County, I especially enjoy working with first-time home buyers, relocation buyers, sellers of distressed property and luxury home sellers. Native to Central Florida, I'd welcome the opportunity to be your advocate too!

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