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  1. #1
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    Default REO's, Short sales, foreclosures

    I have been having a lot of trouble lately with getting utilities on and de-winterizing for distressed properties (short sales, reos etc.). It seems like the listing agents for these properties have so many of them that they can't, won't or don't care about managing them. The buyer's agent will tell me that, yes the seller's agent said the utilities are on. I get to inspection and they are not on or they expect me to turn on gas at meter, water at main shut-off, light pilots etc. I thought I saw a letter that one of you had come up with to email to seller's agent that would let them know there would be a charge to them if I had to come back because utilities were not on or house was not de-winterized. It is not fair to charge my client for return charge. Your help would be appreciated in how you handle this. I did see some responses to similiar threads but I don't see an actual email that I could send out to listing agent. Thank You!

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    Last edited by Tom Rees; 11-10-2011 at 11:53 AM.
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    Tom Rees / A Closer Look Home Inspection / Salt Lake City, Utah

  2. #2
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    Default Re: REO's, Short sales, foreclosures

    Quote Originally Posted by Tom Rees View Post
    I have been having a lot of trouble lately with getting utilities on and de-winterizing for distressed properties (short sales, reos etc.). It seems like the listing agents for these properties have so many of them that they can't, won't or don't care about managing them. The buyer's agent will tell me that, yes the seller's agent said the utilities are on. I get to inspection and they are not on or they expect me to turn on gas at meter, water at main shut-off, light pilots etc. I thought I saw a letter that one of you had come up with to email to seller's agent that would let them know there would be a charge to them if I had to come back because utilities were not on or house was not de-winterized. It is not fair to charge my client for return charge. Your help would be appreciated in how you handle this. I did see some responses to similiar threads but I don't see an actual email that I could send out to listing agent. Thank You!
    Do the inspection as best you are able.
    Inform your client of special limitations.
    Offer to return (for a fee)

    ' correct a wise man and you gain a friend... correct a fool and he'll bloody your nose'.

  3. #3
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    Default Re: REO's, Short sales, foreclosures

    but I don't see an actual email that I could send out to listing agent.
    The hell with emailing the listing agent.

    Tell your client to have the utilities on, and to make sure that they and their agent understand the consequences if not completed. Send an email to your client to remind them. If you want to have a policy where you charge a fee to return, that's the time to let them know.

    Dom.


  4. #4
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    Default Re: REO's, Short sales, foreclosures

    It is totally fair to charge the client for a return trip.

    I feel the Agent has a responsibility to make sure all utilities are turned on and perhaps the client can ask the Agent to pay for the extra trip.

    Why should you be penalized for someone else s lack of common sense?
    I always ask if it is a foreclosure and tel the client they should make sure utilities are on.

    Put a statement in your contract and make sure it is clear.

    Please never ever turn on water,gas,etc as you will be liable for all damages that are incurred as a result .


  5. #5
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    Default Re: REO's, Short sales, foreclosures

    The problem is that the seller (bank etc.) and their listing agent are the only ones that have the authority to get the utilities on. My client (buyers) nor their agent can call up and get them turned on. The listing agent is responsible for getting the utilities on and de-winterized so the house can be inspected. My problem is that the listing agent will state that the utilities etc. are on when they are not and I don't find out until I get to the inspection.

    Tom Rees / A Closer Look Home Inspection / Salt Lake City, Utah

  6. #6
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    Default Re: REO's, Short sales, foreclosures

    Quote Originally Posted by Tom Rees View Post
    The problem is that the seller (bank etc.) and their listing agent are the only ones that have the authority to get the utilities on. My client (buyers) nor their agent can call up and get them turned on. The listing agent is responsible for getting the utilities on and de-winterized so the house can be inspected. My problem is that the listing agent will state that the utilities etc. are on when they are not and I don't find out until I get to the inspection.
    Soooo are you making excuses for them?
    Do you want responsibility to have them on?

    Once again I suggest you put it in your contract that a trip charge will be involved and when enough angry clients come after the Agents that lied or shirked their one duty besides unlocking the doors which is to go out ahead of time and confirm everything is on, things will change.
    Now that is Proactive!!!

    Do your part or forever remain silent and suck it up as a loss for you and your family.


  7. #7
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    Default Re: REO's, Short sales, foreclosures

    Quote Originally Posted by Tom Rees View Post
    The problem is that the seller (bank etc.) and their listing agent are the only ones that have the authority to get the utilities on. My client (buyers) nor their agent can call up and get them turned on. The listing agent is responsible for getting the utilities on and de-winterized so the house can be inspected. My problem is that the listing agent will state that the utilities etc. are on when they are not and I don't find out until I get to the inspection.
    That is just the way it is, deal with it.
    All of the REO's are like that.
    DO the inspection as best you can.
    Tell the buyer the limitations (no power, water, gas,...)
    If they don't accept that don't give them the report.
    No harm no foul. You lose some time.
    If they want you to return, charge a fee.

    ' correct a wise man and you gain a friend... correct a fool and he'll bloody your nose'.

  8. #8
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    Default Re: REO's, Short sales, foreclosures

    I estimate 90% of these places have leaks once the water gets turned back on.
    How many are inside walls slowly dripping from connection points I can only imagine since once gaskets dry out they often have issues.

    We are usually there the same or next day and damage is not yet visible.


  9. #9
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    Default Re: REO's, Short sales, foreclosures

    Quote Originally Posted by Rick Cantrell View Post
    That is just the way it is, deal with it.
    All of the REO's are like that.
    DO the inspection as best you can.
    Tell the buyer the limitations (no power, water, gas,...)
    Agreed.

    When you book the appt (I assume on the phone) explain carefully your position concerning utilities, and the fee to return once they are on. Follow it up with something in your agreement or contract or email.

    It happens all over, and quite often I'm told that one or both of the agents are going to pay the return fee since they screwed up.

    Dom.


  10. #10
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    Default Re: REO's, Short sales, foreclosures

    To a large extent we're just in a no win situation.... agents either lie or just don't know if things are turned on. In many cases they're probably told they are or will be on and it doesn't happen.

    I use to reschedule, try to collect fees, etc. and it just doesn't work. Now, I just do the inspection with what's on and write up the rest. It sucks for the buyer but it's ultimately no under our control. All we can do is inspect what's there when we're scheduled to show up.


  11. #11
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    Default Re: REO's, Short sales, foreclosures

    sounds like you want to not be paid cause your limited in your job. you have to learn to live with what you have or else bring a generator and water supply with you that you can charge a fee for hooking up. It has also been said state it up front there is a charge for a return fee. do they want the responiblity of the water or electric is not right after you have been there and not working right? learn from the situation and tell the client this is the way it is. I can re inspect at a later time when YOU know the power and water is on, but there is a fee for it. be fair to yourself too or else you will be left holding the bag, and that is not fair. Someone has to be responible but should not be you. plan ahead and allow for things to change for a fee.


  12. #12
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    Default Re: REO's, Short sales, foreclosures

    A buyer arrived at her inspection only to find out from me that none of the utilities were on. I told her I would have to charge her an additional fee, payable up front, to return later. She agreed and then called her agent. Her agent then wanted to talk to me. Actually it wasn't a talk, rather a shouting binge. The agent told me "How dare you bill the buyer when it wasn't her fault!" The buyer overheard the agent and promptly got back on the phone and told her agent that the bill would now go to her for immediate payment. Problem resolved. The buyer said her Realtor had promised her all the utilities would be on. The agent never called me again but the buyer later gave me a referral.

    My email confirmations after I have booked an inspection have in them in capital letters: PLEASE COORDINATE WITH YOUR REALTOR TO HAVE ALL UNTILITIES AND GAS APPLIANCES ON. REINSPECTIONS ARE AN EXTRA CHARGE TO YOU. I've never had problems with anyone since.

    According to TREC, a buyer's agent is not responsible to have or to make sure that available utilities are on for inspections. But you would think that every Realtor would do their client the favor.


  13. #13
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    Default Re: REO's, Short sales, foreclosures

    So many people think that they do not have leverage in a sale.
    Ofthen it just boils down to who has the biggest attitude.

    If you are having services not on as a reacquiring problem then you just have to be proactive and get in the sellers (agent/broker) face for them to go out of the way to make sure that it has been taken care of. I would have the buyer tell their agent to contact the seller's agent and demand that they (seller's agent) physically go to the property and verify the status day/days prior to the inspection. I would also tell the buyer to have their agent physically go and also verify the status and report back to them (buyer). This is not stated as a request but as a demand.

    Telling the agent that the services have to be up and working is a no brainier and the agents just need their buttons pushed and often. If the selling agent want the sail to go through they will make sure something is done. If the buying agent wants the sale to go through they will push the selling agent to make sure things are done.

    If all else fails and the buyer pays you to come back then the buyer just has to wait till settlement and then at settlement bring it up. All they have to say is that the seller or their agent has to pay the additional fee or they will not continue with the closing. If the seller balks on paying let the agents pay. Settlement officer can make the adjustment at settlement, reimbursing the buyer for the additional costs.

    Bottom line, the buyer has to dig in their heals and make the demand. The agents will work it out, they want the sale to close so they will get paid. Payday is what they want.

    The buyer has maximum leverage at settlement. They just have to be assertive and not listen to the agent blather. Make the demand and then say absolutely nothing till it has been resolved, just sit there and stair at those at the settlement table. Personally as the buyer's agent I would make the selling agent eat the entire amount. Agents are typically wimps and will split the cost.


  14. #14
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    Default Re: REO's, Short sales, foreclosures

    Gary, I like your attitude. I think your right, I just need to be more in their face with this. Thanks for the pep talk.

    Tom Rees / A Closer Look Home Inspection / Salt Lake City, Utah

  15. #15
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    Default Re: REO's, Short sales, foreclosures

    Garry, while I agree in principal with your first 3 paragraphs, except for some details, I completely disagree with your last 3 paragraphs.
    I would suggest no one take that position or give that type of advice to a client. While in theory the buyer does have all the power until the deal is actually done and over, in principal that is a bunch of nonsense. Suggesting a buyer wait to do anything what so ever related to a deal until closing is extremely inappropriate advice.
    Buying a house is NOT a singular event. There are dozens of related decisions, purchases, costs and family alterations that go along with a new home purchase. The idea that a buyer has power at the closing table is utter nonsense. The buyer is the tadpole. The professionals in the room are the sharks. The sharks understand what each buyer goes through to get to that closing table. The idea that a buyer will be able to re-negotiate reimbursement for anything at the closing table is a joke.
    The sharks know the buyer ..
    - has sold their other house or their lease is up
    - has scheduled movers and already packed
    - has already enrolled the kids in the new school; etc.
    They know the buyer has far too much at stake and will cave if they just keep talking in circles long enough.
    Maybe it works differently in Maryland but around here closing docs are typically all set and printed out when you get to the closing table. Alterations are definitely possible but frowned upon. All parties are expected to have reviewed docs and be ready to sign. Significant changes can postpone a closing.
    A lot of RE's would rather sell their firstborn than give up part of their commission for anything. Expecting them to cave at the closing table is a losing position for a buyer.

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  16. #16
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    Default Re: REO's, Short sales, foreclosures

    Marcus
    Everything you say is correct, however Garry did say "If all else fails...".
    Meaning as a last resort, not as the first choice of action.

    ' correct a wise man and you gain a friend... correct a fool and he'll bloody your nose'.

  17. #17
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    Default Re: REO's, Short sales, foreclosures

    I have to go with Gary on this one. yes the buyer has the power and the money. there are alot of reasons why a deal does not go thru and if the buyer plays it right he/she can hold up a deal. I have seen real eastate agents come up with something to sweeten the deal at the last momment to close the deal. they want their money fast and want to move on. if it is over something simple they will do what they have to, to smooth over the deal. Seriously a few $ over a inspection cause someone other than the buyer or seller messed up over making several $k. a smart relator knows when to cover the costs and make things happen so they can move on to the next deal. otherwise it is back to lookin at even more houses. if you give them the power they are going to take it. Not everyone is going to roll over and pay when they have the huge cost of buying the house and all the other expenses. And yes I have seen relator's make that move. every deal they make is not always simple or easy. everyone is different. But until the deal is signed no one is getting any money. once money is transfered then the buyer loses his biggest position of power. ever try and get money back?? Most times it is an uphill battle, one that you might or might not win.


  18. #18
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    Default Re: REO's, Short sales, foreclosures

    Standard AOS Contract in PA specifies that all utilities are on for Inspection.

    If not, the seller is in breach of agreement.
    Re-Inspect FEE (after utilities are restored) is generally paid by the Seller / Owner.


  19. #19
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    Default Re: REO's, Short sales, foreclosures

    Rick,
    Thanks. On your reading ("...if all else fails.."). Sometimes there are points that I try to make that seem to be lost in translations.

    Dealing other agents and having to go behind them to make sure that they have done their job was just one of the many reasons that left real estate sales as an agent (many decades ago). Follow-up is what a good agent has to do to make sure things are getting done.

    In the case of the property that needs services turned on the buyers agent should be on the selling agent to make sure it was done, even if it means that the buyer's agent goes to the property to verify in person that services were on. Yes, they do not want to do it, but they will. Pressing the seller's agent to verify the services is the job of the buyer's agent. But, as we all know, often if you want something done you have to do it yourself.

    Tom,
    If you are running into the problem that services are not being turned on, you need to be proactive. Call the agents and push their buttons. If I need something at a supply house I will questions their quantity in stock. If I have a concern that the inventory may not be their, I request that they physically go and verify that it is actually there in stock. Do they want to do this? No. Will they do this? Yes. Why? They want my business. Their motivation. If someone refuses to go and verify, I just talk to the manager or the owner of the business. Not a big deal, but prevents a wasted trip and time.

    Markus,
    I can understand your disagreement. The big problem is that buyer's act emotionally in a purchase. They have to be educated to the process so they are not at a disadvantage in any part of the purchase process. Knowledge is power. Buyers understanding that the buyer's agent are not going to act in the buyer's interest first and foremost is the first lesson. Understanding leverage is the second lesson. So many times I have sat at a closing and the buyers do not look at the document that they are signing. They just sign where they are told to with any thought. I have also sat at closing that took hours because the buyer read the documents. The latter I did enjoy watching the other agents rolling their eyes and squirming. I always went with the time allotted for lengthy process. Many times, after a walk through of the property on the way to the closing items would be missing at the property. Sellers took or altered items that were part of the contract. To smooth over the small items I would split the cost with the other agent and make the closing happen. Other times, bigger dollar items, the seller or their agent would have to eat it at settlement. Sellers do stupid things at times just prior to closing. Thinking that no one will notice.

    The buyer sending the invoice to the settlement officer of the re-inspection fee due to services not being on is all that they need to do. Puts every one on notice prior to settlement. It may/should be resolved prior to actual settlement if everyone is doing their jobs.


  20. #20
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    Default Re: REO's, Short sales, foreclosures

    Joseph, Do you have that link. I looked through the PA AOS forms list and I don't see that . Thanks.

    Tom Rees / A Closer Look Home Inspection / Salt Lake City, Utah

  21. #21
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    Default Re: REO's, Short sales, foreclosures

    http://www.parealtor.org/content/upl...s/PDFs/ASR.pdf

    if this agreement is contingent on Buyer’s right to inspect and/or repair the Property, or to verify insurability, environmental
    conditions, boundaries, certifications, zoning classification or use, or any other information regarding the Property, Buyer’s
    failure to exercise any of Buyer’s options within the times set forth in this agreement is a Waiver of that contingency and
    Buyer accepts the Property and agrees to the release in Paragraph 25 of this agreement
    .


    12. insPectiOns (1-10)
    (See Notices Regarding Property and Environmental Inspections)
    (A)
    rights and responsibilities

    1. Seller will provide access to insurers’ representatives and, as may be required by this Agreement or by mortgage lender(s), to
    surveyors, municipal officials, appraisers and inspectors. All parties and their real estate licensee(s) may attend any inspections.
    2. Buyer may make a pre-settlement walk-through inspection of the Property. Buyer’s right to this inspection is not waived by
    any other provision of this Agreement.
    3.
    seller will have heating and all utilities (including fuel(s)) on for all inspections/appraisals.

    4. All inspectors, including home inspectors, are authorized by Buyer to provide a copy of any inspection Report to Broker for Buyer.
    5. Seller has the right, upon request, to receive a free copy of any inspection Report from the party for whom it was prepared.



  22. #22
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    Default Re: REO's, Short sales, foreclosures

    Thanks Joseph. I find it interesting that in PA the seller has a right to receive a free copy of report.

    Tom Rees / A Closer Look Home Inspection / Salt Lake City, Utah

  23. #23
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    Post Re: REO's, Short sales, foreclosures

    In light of the current economic conditions, I routinely confirm that all utilities are on, even with occupied houses (yes, it is that bad). I explain that if the utilities are not on, the system affected can not be demonstrated to be safe or functional. That is exactly how it is documented. One client had been promised that the electricity would be on. It wasn't. I am not certain what her method of persuasion was, but she paid my fee . . . and turned around and wrung it out of the utility company.

    Randall Aldering GHI BAOM MSM
    Housesmithe Inspection
    www.housesmithe.com

  24. #24
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    Default Re: REO's, Short sales, foreclosures

    I had a first 2 weeks ago...
    freak snow storm in October (first time in over 50 years)
    since leaves not fallen, branches fell with the weight of wet snow

    I was in the home 10 minutes
    then Power Failure
    LOL
    Home was on a Well
    so nothing could be inspected.....

    I went back a few days later...
    but in over 10 years and 6000 + inspections
    that was the first time that ever occurred...


  25. #25
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    Default Re: REO's, Short sales, foreclosures

    Quote Originally Posted by Tom Rees View Post
    Thanks Joseph. I find it interesting that in PA the seller has a right to receive a free copy of report.
    In most cases, Sellers do not request a copy of the report.
    If they request, they must disclose....


  26. #26
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    Default Re: REO's, Short sales, foreclosures

    We just do'em. We've found that we loose too many by waiting for utilities and it takes one of our spots. AFA returning, $50+...We let them fight over who's paying that fee...

    The MAZZA INSPECTION GROUP
    www.mazzainspections.com
    Level III Thermo-picture-taker-er...er

  27. #27
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    Default Re: REO's, Short sales, foreclosures

    I don't run into many of the REO properties which have the utilities off at the time of the inspection. When the client calls to place the inspection order we ask them if the utilities are on and if the house is vacant. If they say the utilities are not on or they don't know, we tell them to call us back when the utilities are on.

    If they tell us the house is vacant, we ask if it's a foreclosed property. If it is we tell them to verify with their agent that the utilities are on, then call us back.

    If they tell us the house if foreclosed and the utilities are on, we'll confirm it with the listing agent.

    By asking the right questions and verifying their answers we run into very few properties which don't have the utilities on by the time of the inspection.

    When I do run into one that does not have them on, I offer to do what I can, but there will not be a reduction in price, or they can simply choose to reschedule without any additional charges. It keeps the clients happy and I get more referrals that way. Cost of doing business.

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  28. #28
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    Default Re: REO's, Short sales, foreclosures

    Another trip hazard for the unsuspecting buyer is the HUD owned home. So often a buyer calls me to book an inspection on a HUD-owned home only to find out about that little detail of filling out the Authorization for Utility Activation from that Field Service Management company. And about the extra $150 re-winterization fee. So often their agent didn't know anything about this or in some cases the agent was just plain negligent.

    After all these postings, I made a change to my standard utilities statement in my email confirmations to read (still in caps): COORDINATE WITH YOUR REALTOR TO HAVE ALL UTILITIES AND GAS APPLIANCES ON INDOORS. RE-INSPECTIONS ARE AN EXTRA CHARGE TO YOU. So often the utilities are on, but shut off at the meters outdoors.


  29. #29
    Ted Menelly's Avatar
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    Default Re: REO's, Short sales, foreclosures

    i am doing a 6200 sf and a 2800 sf home tomorrow. Both are short sales and neither have the utilities on. I charged a bit extra for them because when the utilities do come on I am going back to double check the power and water items.

    If I did not do this both buyers may have bowed out from the inspection as next week is holiday time and time is tight.I will have the bulk of the inspection and the inspection reports done when the power comes on in the beginning of the week. add the other items and print. At the least I make many many hundreds of dollars per instead of maybe not doing them. In these tight times some type of arrangement must be met and when you are in the drivers seat they usually go for your arrangements.

    Oh yes. Just to add a note. Times are really tight right now as I mentioned. It seems that a couple weeks ago the phones have almost stopped. I for one am very very grateful for anything I am getting right now. Man, I sure do hate the quiet phone thing. It tends to get one a bit anxious.


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