"No Heating or Water being turned on for appraisals or inspections"?

Question

I have been searching around for a couple months in attempt to find my first rental property to buy, and have found a foreclosure that I think has a lot of potential. However, the listing says:

"Water and heating system will not be activated for inspections and appraisals"

I am sure that this question is posted somewhere in the forums, but I was not able to locate it and wanted to see if this was common, and/or if this should be a concern?

My initial thought process is that:

A. I would have to pay to have these turned on myself for inspection/appraisal, or

B. There is something wrong with one or the other, or both.

Any insight? I am new to investing and this would be a great learning experience to hear some answers. Thanks!

Matthew Paul · Answer

I have an electrician who has his own meter to pop in to check houses like this .

Steve Babiak · Answer

Some banks will let the utilities be turned on in the buyer's name. But the wording from what I read in the OP is that the bank will not allow utilities to be turned on at all. That is usually because the bank has had some property improperly re-winterized in the past and been burned, so they just disallow it altogether. Plumbing might be just fine, or it could be leaky or even completely missing - it doesn't matter, you will have to test with air pressure if you choose to test.

Jim Gramata · Answer

Yes it is common. It most likely is because the services are not active (gas and water).

Sometimes I get the b-box valve turned on in the public parkway where here in Chicago the mains are shut off to each house (shh don't tell) and then check the house pipes for leaks but that is rare. I never do this if the house has been winterized of course. On a flip I don't care at all because I tear it all out.

Jeff Formeller · Answer

Thanks for all the information everyone. I believe after talking to my agent that there is indeed an issue with the plumbing and also the electrical, so I may look into it further and see if it is possible to get it the property discounted enough to where it would make sense financially to pursue.

Ryan Haase · Answer

A lot of the time, I see the meter was pulled from the house for non-payment. It's a pain to get it put back, so the back just doesn't want to deal with it.

NA Jones · Answer

Not allowing utilities to be turned on is pretty common with bank owned properties.  It may or may not indicate a problem.  Problems with the plumbing and electric are also pretty common with bank owned properties ;)

We recently bought a HUD home that was winterized.  HUD would not allow the water to be turned on because of a known issue in the pipes.  As the buyers agent, I had access to the property condition report so I knew what the issue was.  If you saw this listing on a public site, there's a good chance the MLS has documents outlining any major issues with the plumbing - you'd need an agent to access though.

We also couldn't turn on the electric because the home had been vacant so long that it required pulling permits from the town, etc etc etc... I had a hard time finding an inspector with a generator,  so we just did a home inspection as best we could with the electric off.

Rocky V. · Answer

Common with banks.  Either turn on the utilities yourself during inspection period or hire the right inspector with a generator.  Water can be tested using air pressure.

Brendan Spaar · Answer

It might just be me, but I always wonder if there's an underlying reason. I understand them being turned off from the former owner but I would worry about damage from unheated pipes too. I guess your inspector could look at the breaker box & see if the panel is ok for the house. Is there a way to turn the water on at the street just to check it out?

Ron S. · Answer

It's very common although, as a bank, i'd switch them into my name if they were disconnected for non payment in order to ensure the pipes don't freeze and blow a line out.

Brent Coombs · Answer

I would like to know too. My guess is that in most cases, especially foreclosures, the utilities have either been disconnected due to non-payments and/or the plumbing / wiring / appliances have been stolen too!  Vacant one day, missing all copper the next...

"No Heating or Water being turned on for appraisals or inspections"?

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