Inspecting a "winterized" home
Hi, I am looking into purchasing a bank owned home that has been “winterized”. I have submitted an offer that was accepted contingent upon an inspection and appraisal but the inspector says that he needs the utilities on to be able to do a full inspection. Meaning water, electricity and the system for the heat….
Hi, I am looking into purchasing a bank owned home that has been “winterized”. I have submitted an offer that was accepted contingent upon an inspection and appraisal but the inspector says that he needs the utilities on to be able to do a full inspection. Meaning water, electricity and the system for the heat. The seller is saying (the asset manager for the bank) is saying that he paid to have the property winterized and he is not turning back on any of the utilities because the property is being sold “as-is”. My accepted offer was $60K less than the asking price but now I am feeling a little spooked and wondering what my options are. Make an even lower offer or figure out some workaround to get the utilities turned back on for a complete inspection. Any advice would be much appreciated.
Steammill–that doesnt sound like nearly enough. You need to assume that the pipes in the wall, the furnace/boiler, and electricity may need to be replaced at least in part if you can’t test if they are working IN ADDITION to obvious damage to carpets, etc. “Crack in basement foundation” could be a big problem if it’s an indication of structural problems. If shingles are missing there could be costly water damage in the attic or ceilings. Please get the property professionally inspected and only purchase if you have significant cash reserves. You need to speak to contractors to get an idea of the cost to repair major systems if they turn out to be unsafe.
It is pretty safe to assume that a buyer who contracts to buy your house will want to have a professional whole house inspection conducted. So why not wait until you have a buyer who wants and will pay for an inspection?You can try to visit http://equityinspection.com// site for any help!
I’m interested in a property that is bank owned – as usual the listing is pretty much one-sided (which I totally understand). No disclosures, no letters, home is winterized, etc. Since I don’t have the luxury of even turning on any of the fixtures (a/c, stove, sprinklers, etc.) I’m trying to gauge what amount of risk (dollar-wise) I should build into an offer. Suppose the house is listed at $489K – comps have been run and that price seems “fair” for a home that shows well. This one needs $4,000 to $6,000 estimated in immediate repairs that are mostly cosmetic (some roof shingles missing, carpet in one room is trashed/moldy, french doors to deck don’t close all the way and moisture can get in, crack in basement foundation). For example, I’m taking the RISK that the 8-year-old stove doesn’t work, or the hot water heaters need replacement or one of the furnaces is inoperable. Is $5K enough “reserve” to deal with this risk? Not flipping, this will be primary residence
You should be especially careful to look for signs of leaks etc. that the owner may be trying to conceal by not turning on the utilities. It is entirely plausible that the seller simply doesn’t see the need to go through the expense and hassle of turning them on but it could also be that there would be risk of property damage or evidence of larger problems if they were on. The price you pay should reflect full replacement of all these systems since you cannot tell beforehand whether they work. Most banks won’t finance a house without running water and electricity and they’ll want to see evidence that these are working as part of the appraisal. This is why “as is” purchases can be tricky if they dont meet the criteria of your bank.
This is a tough one. Foreclosures, short sales & others sold “as is” are typically just that. Supposedly you’re paying well below market to account for that.
Has the inspector been in al all? Typically he could tell you that the electric, plumbing & heating has been upgraded and looks tobe to code and done correctly without flipping any switches or turning any faucets. Sure, the water pressure might be a little low ($2,000-5,000 new 1″ service from the street). The heating system might be a different story but he could still tell you what type of system it was, roughly how old it is and whether or not it looks professionally done.
If this house is a renovation project and all the systems are quite old then that’s what you are buying and you need to get quotes to upgrade each system.
Yes, its all risky but presumably you’re also paying well below market. If there’s no extra cash after closing to take care of potential renovations then this housse is too expensive for what your budget is.