Inspections with utilities shut off?

How can I get an inspection on HUD and REO’s with the utilities shut down. I cannot submit offers subject to inspection for HUD as well as most REO’s? Are you guys inspecting before you buy or are you just buying based on a contractor walk through or on your own experience. Thanks

My own experience and the ASSUMPTION that everything will need work.

With that in mind make sure your offer is very low. Your going to lose a lot more of these than you buy. My feeling has always been "It’s MY price or I’m out! This is a business, if some bank doesn’t want to accept my offer they can keep it. I’ll make another offer to them next month for $10,000 less than the one they just rejected. Two things are going to happen… 1) They sell it to someone who pays more. or 2) They get sick of having it and take one of my offers. I win either way.

HUD, VA and REO properties have uniformally been vacant for several months and in almost all cases the old owners stopped doing maintenance on the properties for many months before the foreclosure. It is always a safe bet to assume you’ll need to do about $2k on work for water heaters, heat pumps, furnaces, AC units and the like. Most times it is less then that, and you’ll be pleasantly surprised when it happens.

Are there any major things I can check for myself in regard to wiring (being aluminum) or any other MAJOR things I need to be aware of?

The main thing I check on HUD/VA/REO wiring wise is check the breaker and fuse boxes. If they are reasonably modern and in good shape you can NORMALLY assume the wiring in the rest of the house is good. If there is any old style fuse boxes - or signs some weekend duffer has been hacking around with it, prepare for the worst.

Also look under sinks where the water lines are, as well as in the basements. Sometimes you’ll see signs where doo-doo heads have tapped into the electrical or water lines for their little projects - things you’ll probably have to tear out. Also, stick your head in the attic and any crawl spaces. Again - you can be amazed at what you find.

The last two houses I have bought were an REO and a HUD. We had the utilities turned on for a day within a week of the accepted offer to inspect, but never before making an offer. I agree with Salverston with having a $2k budget for unpleasant surprises with the utilities!!

I have made offers on properies that the bank would not turn on the utilities. I factored in replacement of the major system that I could not verify. For example they won’t turn on the electricity, I estimated a new a/c unit and electrical box, ($4,500). I factored it in as if it failed the inspection and I needed new. If the deal is still sound I make the offer. They may or may not accept but that is the only way I can make that offer.

With tight margins already, it sucks to have to cost factor those items in but it makes good sense to do so. But don’t you guys put together offer packages for the REO properties? Like a punch list of whats wrong to submit with your offers to justify to the lender your offer, or is that even necessary?

I don’t think this is necessary. Just verbal over the phone is usually good enough. BPO’s and Banks know they have sh*tboxes on their hands. No need to put it in writing.

I learn something new everyday. Just budget like it’s gonna happen and all is well. That is actually easier than trying to coordinate the utilies as well as PAY for an inspection. Thanks all!