Preparing For The Inspection

By
Home Inspector with Inspect.Net, Inc.

One of the biggest obstacles I'm coming across in the inspection process is a home that is not prepared to be inspected.

Some of the biggest problems are:
1. No power to property
2. No water to property
3. Physical damage to the property (including vandalism)

What can Realtors(R) do to help minimize this?
1. Call the listing agent to confirm services are on
2. Call the City to re-confirm water service is on
3. Call the utility company to re-confirm electric service is on

One service that is preferred to be on, but can be worked around is gas service. If the gas is off, you can always call the utility service provider, and request the gas service be turned back on. For liability purposes, they will always do an evaluation of the gas devices to ensure they are in good working order. The key is to make sure you do this before the close of escrow, so if there is a problem, you can do something about it before the deal closes.

Physical damage is hard to prevent, and comes in several flavors:
1. Copper wiring cut from house preventing operation of electrical systems
2. House plumbing fixtures & pipes vandalized preventing operation of plumbing systems

Without water or electricity, its like trying to check out how well a car runs without gas ...

The biggest reason I can provide for doing just a little extra legwork by confirming services are on is that you only have a limited amount of time to perform all your due diligence inspections. Especially with bank owned properties, that period can be especially short, so there is little to no margin for error in the process.

Of course, the other school of thought is "who cares, its an as-is deal anyways?"

That argument holds up well in the short run, but quickly loses value when angry cleints call you after the deal has closed saying "I know it was an as-is deal, but I dind't know THAT was wrong, otherwise I NEVER would have bought the home"

Think this doesn't happen? Simply ask any professional Realtor(R) who has been in the business for any period of time, and they can usually personally testify to how often this happens.

Inspections are part of the process because they allow clients to negeotiate with all the facts laid out in front of them. Imagine having to pick your spouse having only some of the facts, its not quite that drastic, but you'd be surprised just how unhappy a client can become if they feel they were not provided complete disclosure before making the final purchase decision.

Here's to your business success, committed to serving you and your clients with the utmost of integrity.

Regards, Jeff Bond

Comments (8)

ARDELL DellaLoggia
Better Properties Seattle - Kirkland, WA
Short sales where the owner has no money and the utilities have been shut off has become a problem.  Who is going to pay the back bills to get the utilities turned on?  No easy answers on that one.
Mar 26, 2008 05:53 PM
Jeff Bond
Inspect.Net, Inc. - Escalon, CA

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

Mar 26, 2008 06:12 PM
Christina ONeal
At Home Real Estate Group - Ripon, CA
Realtor - Ripon California

Hey Jeff,  Welcome to the rain.  So cool to see you here.  You bring such value to the real estate community locally.  I am very excited to see you share with the whole Active Rain community.  We are all going to benefit from this.

You are so right with being prepared for your home inspection.  Thanks for the reminder to be aware.

 

Mar 26, 2008 06:32 PM
The Trumm Team Omaha Homes for Sale, Real Estate
Keller Williams Greater Omaha - Omaha, NE

Welcome to ActiveRain!

If you would like a few tips on getting the most out of ActiveRain, please visit my blog Welcome to Active Rain.  It has a few simple steps of what to do now that you have joined.

If you ever have any questions, just let me know.

Troy Trumm
Mar 27, 2008 03:29 AM
Keith Elliott Jr
KEIRE Realty Group - Manassas, VA
Principal Broker/Owner

Hello Jeff,

Welcome to Active Rain and congrats on your first post! The opportunities to learn and network are incredible here. Best of luck to ya!

-Keith

Mar 27, 2008 06:35 AM
Benjamin Clark
Homebuyer Representation, Inc. - Salt Lake City, UT
Buyer's Agent - Certified Negotiation Expert

Welcome to Active Rain! For some tips on how to get started here, check out my blog entry at ActiveRain Fast-Start Tips for Quick and Easy Points

Happy blogging and good luck!

Mar 27, 2008 05:05 PM
Vince Santos
StepByStep Home Services LC - Canton, MI
Southeast Michigan Home Inspector

So who is responsible for having the utilities turned on? I've been doing quite a few bank owned homes lately and my clients always seem to think I will have the utilities turned on and the home de-winterized. Of course this is far from the truth yet I would like to be able to give them the correct information as to who is supposed to take care of this. What should I tell them?

Apr 21, 2008 03:27 PM
Jeff Bond
Inspect.Net, Inc. - Escalon, CA

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

Apr 21, 2008 04:06 PM