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Foreclosure Inspections; Why Didn't They Have the Gas On?

By David Helm

Home Inspector with Helm Home Inspections

March 06, 2009 12:26 PM

Many Realtors and Mortgage brokers have written articles on short sales and foreclosures. One point the haven't touched on is what is necessary to prepare a foreclosed home for inspection. When banks own the home they often (usually) have them winterized and often allow propane tanks to empty. Other utilities are usually left on. It is understandable that they would want to protect their investment as much as possible. Unfortunately, this protection makes it impossible to do a thorough home inspection.

When buying (or selling for you Realtors out there) a foreclosed home, it is very important to insist that the bank has the home de-winterized and has propane put in the tank. Without these items being taken care of, the water heater, heating system and plumbing systems can not be fully evaluated. I just returned, today, from a re-inspect of one of these homes for just the reason I've stated. Not only did this slow down the process, it also cost the buyer an additional fee for me to go back out to the site ( a rural one and some distance to drive). So please, on foreclosure sales, get those utilities back in operation!

Thanks for reading,

David Helm, Bellingham Washington Home Inspector

http://www.helmhomeinspections.com

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Comments(10)

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Lynda Eisenmann

Preferred Home Brokers - Brea, CA

Broker Associate ,CRS,GRI,SRES, Brea,CA, Orange Co

Hi David,

Good point and I have read a few others on the topic. Yet you mentioned propane, this never occurred to me before. We use natural gas in most our areas in So Cal.

Not sure about other states, yet in CA our purchase agreement states the seller is responsible for having the utilities on for the buyer's inspection. Unfortunately those who haven't read that clause usually do a lot of finger pointing when the time comes.

A couple of the agents in my office who do short sales and REO's regularly at times may have 30 open utility accounts on behalf of their (lender) clients.

Mar 06, 2009 12:37 PM

Valorie Stover, Realtor for Casta del Sol

Casta del Sol Real Estate / HomeSmart Everygreen Realty - Mission Viejo, CA

Mission Viejo,CA, Active Adult Community!

Hi David,

I have had a bank tell me it was my buyer who had to make sure the utilities were on for inspection. I just make sure to find out ahead of time so we don't have delays.

Mar 06, 2009 12:53 PM

Charles Buell

Charles Buell Inspections Inc. - Seattle, WA

Seattle Home Inspector

David, I would argue that anyone that turns the heat off in a house in the winter really isn't interested in their investment.

Mar 06, 2009 12:56 PM

David Helm

Helm Home Inspections - Bellingham, WA

Bellingham, Wa. Licensed Home Insp

Lynda, Thanks for reading. I expect that in rural areas of California you will find propane in use. Natural gas lines generally are too expensive to run far out into the countryside.

Valorie, Thanks. That's a new one. I've never heard of the buyer being responsible for utilities on a home owned by someone else.

Charlie, Point well taken. I should have kept that statement related only to the winterizing.

MC2, Don't know your name, but thanks for the comment.

Mar 07, 2009 04:02 AM

Bob Elliott

Elliott Home Inspection - Chicago, IL

Chicago Property Inspection

David if the dewinterize , they need someone there to rewinterize and will have to pay for both.

This actually costrs much more than the Inspection.

Not only the above is an issue , but in my area these guys never winterize properly and the pipes have busted.

I often end up doing the best I can in finding the other issues ,since most of these are as is.

As far as return trips go I offer a free return ,which is not great for the bottom line.

Mar 07, 2009 01:57 PM

Kevin Corsa

H.I.S. Home Inspections (Summit, Stark Counties) - Canton, OH

H.I.S. Home Inspections, Stark & Summit County, OH Home Inspector

Around here, most of the time it is either difficult, or impossible to get the banks to agree to have the utilities turned on. Sometimes, depending on the location, the homebuyer can get the electric and gas turned on. Cities will not turn on water for anyone but the owner of record.

Mar 07, 2009 10:09 PM

Rick Bunzel

Pacific Crest Inspections - Anacortes, WA

Good Post -

In the last 3 months I have had about 20 inspections that have had no heat. A number of those were in December and January during our cold snap. This is in spite our our strong recommendation to have ALL UTILTIES on.

I also have some strong language that turning off the heat and allowing a home to get below freezing is bad for it regardless of whether its winterized or not. Most companies that claim to winterize a home do a poor job and its almost impossible to blow out all the pockets of water in a home. Damage can happen that may not be apparent for several months after the home has been re-occupied.

My best advice to clients is buy a home warranty on all bank owned property. This will give them some protection from latent defects in the home.

Rick Bunzel, CRI
Pacific Crest Inspections
NAHI Member of the Year 2008
NPSAR Affiliate of the Year 2006-2007
WWW.PacCrestInspections.com
360-588-6956
Fax 360-588-6965
Toll Free 866-618-7764

Mar 08, 2009 06:17 AM

Charles Buell

Charles Buell Inspections Inc. - Seattle, WA

Seattle Home Inspector

Ditto, Ditto and double Ditto what Rick said----just don't do it----somehow it should be close to illegal:)

Mar 08, 2009 07:51 AM

Vince Santos

StepByStep Home Services LC - Canton, MI

Southeast Michigan Home Inspector

Most of my inspections are on bank owned properties and the utilities being turned on seems to be something nobody wants to pay for. Most clients tell me the banks say the buyer is responsible for having the utilities turned on and the property de-winterized and winterized.

Unfortunately clients, or friends of the client, decide to save a few bucks by turning on the water at the main themselves unaware of the broken pipes throughout. Arriving on site to water dripping out of walls and the ceiling is the norm.

Mar 08, 2009 10:40 AM

David Helm

Helm Home Inspections - Bellingham, WA

Bellingham, Wa. Licensed Home Insp

Hi Bob, Yes if they are winterized and the home is not closed quickly (bear in mind that in the Pacific Northwest we seldom have days or nights below freezing after February[He says this while it is currently snowing outside]) it should be re-winterized. . . .and generally, there are plenty of issues to be found on most foreclosed homes. I still don't think it does the client good service if all systems are not inspected.

Kevin, It seems that the banks here will de-winterize/put in propane reluctantly, but they do comply.

Dana, Interesting concept. I don't know anything about real estate contract rules here, but it would be a sensible thing to do.

Rick, Couldn't agree more. Saving a few bucks could cost a bunch.

Charlie, Yup!

Vince, Good point, and the banks really do have the responsibility since they are the owners.

Mar 09, 2009 07:20 AM