Made offer on REO

5 Replies

I made an offer on a foreclosed property. It's been foreclosed for two years. Water and power off. I'm wondering how I can be sure the water and power is functional before it's mine. I don't want to buy it and then there's a major problem that was impossible to know about.

Hi @Virginia Reasor You should have time to inspect the property between the time you get your accepted offer and the time you close the deal.

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@Virginia Reasor If you just put an offer and whether it gets accepted or not. The foreclosed property should have power/water on. All foreclosed property once they turn it  to a brokerage one of the first task they ask via Equator is to turn utilities on. This way when they have an inspector go check out the property to give them estimates on any work the bank will do, the banks have the utilites on already. The best thing to do is to contact the brokerage company and ask them to turn on utilities for you prior to go viewing the property. 

With many REO's they will not allow you to have the utilities turned on, not the end of the world. Utility co.s generally require written permission from the owner to turn on utilities. Bring a good size generator, 8kw or so, and power the house to check applicants, AC, etc. Plumbers routinely do an air pressure test on the water lines, if freezing pipes are an issue.

I had a property that I bought with the water and electricity off... it ended poorly with the kitchen ceiling falling in. Ask the broker to turn everything on, you will probably have to pay for the cost of that (but if you bought it you would pay anyway), Air testing the lines will only test the incoming lines, not the drains. Also, that would clear up any liens by the water or sewer utility before closing. 

If it quite possible that the bank will say no to turning the utilities on. You should make it clear that if the systems work and have no leaks you will buy it, and that if there are problems you will negiociate with them

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