HUD Home won't turn water on for inspection

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HUD Home won't turn water on for inspection

Richard Bradshaw
Investor · St Petersburg, FL · Member since 2015 · 127 posts · 39 votes

I am under contract to purchase a HUD property that has been vacant for about 2 years. I am having an inspection performed next week but they will not allow me to turn on the water. I do know that it has failed a pressure test already.

There are no signs of leaking plumping anywhere in the home. I have a plumber coming to do another pressure test next week to try and find the problem. 

My question is, is it too risky to purchase this home without having the water turned on and knowing the exact problem? 

Has anyone ever ran into this situation? What are some of the costly issues I could run into if I purchase? 

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Bawo Ayomike
Accountant · Washington, DC · Member since 2018 · 4 posts · 1 vote
7y

Thanks @Richard Bradshaw, and $2 - $5K is very reasonable especially if you're getting an otherwise good value for the property. This is reassuring

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    10y

    Just assume that it needs some water line and fixture repair/replacement in your pricing. If you are already at a steal, with those things factored in, move forward. If not, you have to ask yourself if it is worth the price you paid with that unknown factored in. This is common with HUD, btw. Ran into it 2 years ago on a HUD house, same scenario.

    Most likely scenario is a busted pipe from freezing, a fixture left on (or one that won't hold pressure), or an undetected leak from underground. If you have an assumed working cutoff valve in the house, you should be able to narrow it down to the house itself at a minimum. 

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  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    10y

    Could be anything from a faulty shut off valve to a broken pipe but you should be able to identify the issue via the pressure test.

    The problem is that if you are getting a loan the water will not be on for the appraiser.You should discuss this will your loan officer asap to see if they have a "go around" as you will not be able to complete any repairs prior to closing.This is a common issue which causes many financed HUD purchases fail to close

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  • Sarah Ziehr
    Real Estate Broker · Chicago, IL · Member since 2015 · 531 posts · 266 votes
    10y

    You have already asked the bank to turn on the water and they refused? 

    I would ask again. 

    Are there any visible signs of water damage? 

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  • Percy N.
    Developer · Philadelphia, PA · Member since 2015 · 2k+ posts · 904 votes
    10y
    Richard Bradshaw every REO property I have purchased has had some minor plunking issue to missing copper. It's common in our area, especially HUD. Put another HUD property under contract this week and just budget for fixing some leaks. I don't think it is worth messing with the seller, next time just include it and adjust your offer. BTW, the bigger expense could be when the sewer lateral gets clogged. That could cost 3k to $5k
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  • Jason V.
    Investor · Rochester, NY · Member since 2016 · 477 posts · 426 votes
    10y

    @Richard Bradshaw This was my experience with my HUD home as well. Here's the good thing: you know the main shutoff in the house works. This is important, because replacing that, or any other fixture if that doesn't work, means shutting the water off at the road (or getting very wet.) Shutting the water off at the road can be a very expensive proposition, and might trash the front lawn, because it typically has to be done by the town/village.

    In my case, the house was a full tear out of everything, so I just replumbed it while I had the walls open (I was doing every plumbing fixture in the house anyway) using PEX lines/connectors. Beats the snot out of sweating copper.

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  • Greg H.Pro Member
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    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    10y
    Originally posted by @Sarah Ziehr:

    You have already asked the bank to turn on the water and they refused? 

    I would ask again. 

    Are there any visible signs of water damage? 

    This is a HUD home and HUD policy. The Field Service Manager will not authorize the water to be turned on and it is a federal crime to do so

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  • Account Closed
    Kalamazoo, MI · Member since 2014 · 224 posts · 129 votes
    10y
    Just budget for repairs. You may not need them. Big ticket would be the water heater or something under the foundation. Lots of foreclosed homes in cold climates are like this. If a little water hiccup scares you dont buy a distressed property. It gets much worse.
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  • Richard Bradshaw
    OP
    Investor · St Petersburg, FL · Member since 2015 · 127 posts · 39 votes
    10y
    Originally posted by @Greg H.:
    Originally posted by @Sarah Ziehr:

    You have already asked the bank to turn on the water and they refused? 

    I would ask again. 

    Are there any visible signs of water damage? 

    This is a HUD home and HUD policy. The Field Service Manager will not authorize the water to be turned on and it is a federal crime to do so

    Thank you for this information. 

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  • Richard Bradshaw
    OP
    Investor · St Petersburg, FL · Member since 2015 · 127 posts · 39 votes
    10y

    thank you everyone. This was very helpful 

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  • Bawo Ayomike
    Accountant · Washington, DC · Member since 2018 · 4 posts · 1 vote
    7y

    I'm looking at this review and am facing a similar issue where the seller does not want to turn on the water. @Richard Bradshaw, did you resolve the water problem? What was your experience?

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  • Damaso Bautista
    Rental Property Investor · Hawthorne, CA · Member since 2018 · 655 posts · 900 votes
    7y

    @Richard Bradshaw

    Why don't you knock on the next-door  neighbors door, ask them if you could pay them $50 to hook up to their outdoor water for an hour.  Hook up a long hose from their outdoor water faucet to a water faucet on the home.  Turn on the water and do the inspection.

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  • Richard Bradshaw
    OP
    Investor · St Petersburg, FL · Member since 2015 · 127 posts · 39 votes
    7y

    @Bawo Ayomike This was a number of years ago. I believe there weren't any major issues. I just add $2-$5k to the rehab of any property I buy that doesn't have the water turned on. That covers any instance that I may have to repipe the house. 

    @Damaso Bautista Sounds like a great idea but if there is a burst pipe and it causes a lot of damage I'd be liable for that. A pressure test is much safer 

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  • Bawo Ayomike
    Accountant · Washington, DC · Member since 2018 · 4 posts · 1 vote
    7y

    Thanks @Richard Bradshaw, and $2 - $5K is very reasonable especially if you're getting an otherwise good value for the property. This is reassuring

    1Reply
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