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Should Buyers Be Responsible For Utilities Cost While In Escrow?

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Services for Real Estate Pros with Crescent Moon Realty, Inc. & Land N Sea Auctions.

Should a real estate agent bear the expense of turning on utilities on a vacant home or should the buyer? Here in California more and more vacant homes do not have the utilities on because they are either banked owned or a short sale in process (and having the utilities off discourages squatters). HUD makes it apparent that they are not responsible for having the utilities on any of their properties, and it is up to the agents or the buyer to have them turned on for any inspections at the agents or buyers expense.

 So when faced with having a physical inspection done on a property, inspections cannot take place until the utilities are on. Here is the challenge, this may seem trivial, many times short sales and bank owned properties deals do not close, and turning utilities on can be a nice tidy expense. So, many listing agents -- due to the risk of escrows not closing are asking the buyers to bear the cost.    Is this a reasonable request to ask of a buyer? What if the buyer does except the responsibility and escrow does not close.

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Being a real estate broker takes on the form of leadership. The agent/broker role is to lead the client through the home purchase or sales process and serving them with the highest customer service standards. Crescent Moon Realty, Inc & Land N Sea Auction goal is to help the client achieve as many of their goals as possible - so that both parties feel that they are in a win-win.

Find out the benefits to selling or buying a home traditionally or non traditionally ---Contact us @ 1-760-650-2157 Or visit our websites @ www.LandNSeaAuctions.com or CrescentMoonRealty.biz.

Lorraine or Loretta

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Cara Marcelle Mancuso
Golden Girls with SW Desert Homes - Tucson, AZ
Call a Marana neighbor, I'm THERE!

I hear you on this one - and go through it all the time.  I swear I am buyer's broker on more distressed sales than others lately, and I have to caution and warn them that most of the time, the REO sellers will NOT turn on the utilities.  I also understand that if it's a short sale, and the owner hasn't been paying bills for whatever hardship or situation, there can be a mighty back balance built up, and the utility company wants back pay, so the owner CAN'T afford to turn them on.

Then, if the utilities have been off for awhile, you also have to add-in permits, inspections to turn on Gas and/or water, etc, and then the start up fee.  To ask the buyer to do this on a property they aren't even sure they'll have a successful COE is risky again.  I tell them thheat is the cost of trying to get a home so under market value.  That it will even out in the end.  I see no other way arout it right now.  I'll look forward to reading everyone's comments here.

Jul 10, 2010 04:31 AM
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

Cara:

Its become a major sticking point here in California. The other day I checked into the cost of turning on the utilities and it was going to cost $300.00, well that all good and well if you can bank on the escrow closing. The listing agent was not willing to turn the utilities on and my buyer said they did not want to responsible -- that leaves the buyers agent. 

Jul 10, 2010 05:23 AM
Rick Irving
My Texas Home Real Estate - Fort Worth, TX
Rick Irving Knows Real Estate

Most of our REO properties have the utilities on for the inspection. The listing agent usually must turn them on in their name and then is reimbursed for the expense. On the HUD properties, I have the buyer put the utilities in their name for the inspection. HUD will only allow them on for a few days for the inspection. I would try to avoid putting the utilities in my name and let the buyers put them in their name.

Jul 10, 2010 05:27 AM
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

Rick:

It should be that the listing agent get refunded for having the utilities on -- I am seeing more and more that are not and asking the buying agent or buyer to be responsible.

Jul 10, 2010 09:10 AM
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