How to verify sellers numbers for heat/gas/water

Question

Hey everyone, I want to say thank you for all the great advice this forum has given me so far. Im trying to buy my first 4plex right now. The seller has given an estimate for what he pays for gas/water/electric. Whats the best way to verify these numbers if any? Thanks again everyone

Nick

Nicole W. · Answer

I would just ask the owner for documentation of the statements. Utilities are public record and you may be able to put in a records request  for that specific address.

NIcholas Hamel · Answer

@Sean O'Dowd

Great idea!  Thank you

Sean O'Dowd · Answer

The public record tip is right. One additional thing you could do though.

If the 4plex is near you, I'd suggest knocking on the neighbor's door. Tell them you are looking about buying in the neighborhood and would they mind sharing with you what their utility cost is?

9 times out of 10, they verify what the public records will say.

The one other time: you'll find out that the neighbor bill is way lower than what the records say your new property pays. In that case, it means your property has something wrong, like a leak.

Easy five minute investment, but could save a ton of money

Joe Splitrock · Answer

@NIcholas Hamel you can request a schedule C and tell them to black out any other properties on there. If they don't want to share this information, you can ask for signed financial statement. So instead of an estimate of utilities, they list the exact amount and sign legally a declaration stating it is truthful.

Years ago, the utility companies would provide this, but most no longer share this due to privacy concerns. You can ask them to provide a "budget amount". That is not the precise amount, but rather an average using last years usage.

Ultimately, the location, size of building, number of occupants and furnace/hot water heater type should allow you to estimate these expenses.

Steven McCutcheon · Answer

@NIcholas Hamel

Looks like everyone has pretty much answered this, but it’s public records. So if the seller doesn’t provide docs (which they should be able to) you can call the companies and they should be able to tell you!

Dan Armich · Answer

I had success asking for Schedule E from the sellers. Try going in with the argument that you don’t care with the bills are as long as you know what you are dealing with. A lot of high utility bills have an explanation and a solution. You can always walk after seeing the actual. - Dan

NIcholas Hamel · Answer

@Nicole W.

Awesome thank you nicole!

NIcholas Hamel · Answer

@Joe Splitrock

Perfect.  Thank you joe

NIcholas Hamel · Answer

@Steven McCutcheon

Thats exactly what i will do.  Thanks steve appreciate it

NIcholas Hamel · Answer

@Lynnette E.

Lol wow thats interesting. But great point thank you

How to verify sellers numbers for heat/gas/water

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