Preparing For The Inspection

ARDELL,

In our market, short-sales and REO properties are almost exclusively what is selling.

Cities here have come to understand that it is also their problem, so Realtors(R) here are asking the City to turn on the water for a few days, just to perform the inspections, and they usually oblige because they know its not going to use much water, and if the home successfully sells then the neighborhood begins to look better again, which reflects well on the whole community.

Our local utility companies also are fairly workable to turn on service for a short period of time. Typically the Realtor(R) calls and asks for a 1-2 day window to perform inspections, and if the utility company will not turn it on for free, then the selling agent will agree to accept the bill for just those 1-2 days, which again is very minimal because of the low use during that period.

In the beginning, back bills were a factor, but at this stage local Cities and utility companies around here have come to realize that an empty home is bad business for them. After it is explained to them that in selling the house they will begin to generate a little revenue, they usually warm up to the idea of being a little more flexible.

The typical procedure I see Realtors(R) do around here is to wait until they have an accepted contract, then immediately notify the city & utility company they need a quick 1-2 day window of service. I think for the most part their requests are being met, and I haven't heard many comment that they even had to pay a bill.

Regards, Jeff Bond

Vince,

The simple answer, is it is the seller's responsibility.

A more detailed answer is that the seller can do whatever they want to do (or not do), since it is their home. They technically don't have to turn the power on, or the water if they choose not to, and since in most cases the responsibility is put on the buyer to do whatever due diligence they deem necessary to answer any questions they have concerning the property, they subject themselves to risk if there are no utilities on, and they decide to proceed with the transaction.

The best solution is for the selling agent to request the listing agent have services turned on temporarily to allow for inspections to take place.

An almost as good solution is for the selling agent to temporarily have services turned on in their name, just long enough to do the inspection. This only makes sense if the client has written an offer on the home, and they express a desire to proceed, because if they don't, then there is a cost associated with having the services turned on.

Thats usually not that big of a deal, because an inspection usually takes less than $5 in water & electricity to perform, so the bigger issue is the hassle of getting services turned on.

It all depends on how far a listing agent is willing to go to prepare the house for sale. Savvy listing agents have everything turned on, because they know in doing so they provide a home with less "unknowns", and therefore less risk to a potential buyer. In doing so, they eliminate the fears associated with buying a house as-is, when you don't really know what as-is really "is". which usually makes a buyer much more likely to feel uncomfortable making an offer on the property.

I do something unique with my clients (Realtors), by working out an arrangement with them where I will turn on the water (and sometimes the power), and they provide a release to me in case something happens in doing so. The last thing I want in trying to help put together a deal is have a bank turn around and say "hey why did you turn on the water and cause all that damage, we didn't give you permission to do that, we never would have allowed that?"

Without this agreement, I will not turn services on, and I don't use this agreement with many Agents, because most don't understand how it benefits them to have all services on when buyers come through to do their inspections.

I'd say your best bet is that as soon as you show a property, quickly check the front light for power and a sink for water, and just make a note in the file. When your client makes an offer, if there are no services, immediately call the listing agent and request they have services turned on so you can do your inspections. If the don't want to, turn on services in your name, ask the listing agent to turn on the breaker and water main (since it is their clients responsibility/liability) for the inspection, then cancel services right after the inspections.

Other than that, make sure your offers consider the "worst-case scenario" for repairs, so you don't end up under-estimating costs associated with items that could not be inspected since services were off.

I also publish a guide for my clients that lists the typical costs for repairs, so when they go over the big financial picture with their clients, they have rough numbers to use when considering the "total" cost including the purchase and potential repairs based on a visual examination of the home.

You have a tough job ... and I think the more clients see you are really trying to represent them to the best of your abilities, they will be understanding when certain things pop up. And more importantly, I think they will be more likely to send you referrals, because they see that even under very difficult circumstances you are trying your hardest to do what is best for them. Clients really appreciate that, and although the long-term benefits are intangible, they are very real.

You can always find me on the World Wide Web at http://www.inspect.net

Regards, Jeff Bond