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Seller not turning on water prior to closing

Hello all. I am a first time homebuyer. Me and the wife zeroed on a foreclosure property in a neighborhood we really like. We went to see it and it was in an ok condition overall (needs lots of fixing like window screens, door knobs, sinks, etc). Water heater was also missing. But nothing major or serious.

Except the water utility. The problem is that seller stipulates on the listing website that "Water will not be turned on prior to closing. Please confirm with lender that they can close without water being turned on PRIOR to making any financed offer." Well, how would I perform a water inspection then? What if toxic waste starts coming out of faucets once it's turned on? We both really like the place and want this annoying condition out of the way so we can perform the water inspection by a certified professional. Can a seller make this stipulation? Is it allowed under Illinois law? What are my options?

Sorry for being so eager and having so many questions. But if anyone can show me how to deal with this condition, I will REALLY appreciate it. Thanks!!

Regards
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June 25 2013 - Rolling Meadows
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Replies (17)

It is not illegal, but you might want to discuss it with your inspector. I assume you hired one. It is not unusual on an REO for the bank not to turn on the water. There may or may not be any issues.
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June 25 2013
Sometimes when you buy a bank owned home you won't be able to get everything you want, that is why you get a pretty good deal price wise. So you have to have a leap of faith sometimes and this might be one. I would be somewhat surprised if your lender allows the sale without a water heater, but maybe they will. If not then what are you going to do? You might have to buy a water heater and add it to a house you do not own yet. Welcome to bank owned homes. I would not worry about toxic waste.
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June 25 2013

Usually with REO's the listing agent pays the bills and gest reimbursed by the bank. If they don't submit the invoices on time they loose the payment and cannot resubmit. Usually water bill is the biggest bill they have to pay, so if they have a lot of properties, that is a lot of cash up the front from their packets. Many banks will try not to turn on water up the front  because it cost money plus fees, and they are not sure you will get the loan.

The best way is to stand your ground and be prepare to walk away because to a bank it is just a file. You can always have your attorney write the letter to the listing attorney skipping the listing agent. Many times the listing attorney has power from the bank to do anything they need. And trust me, attorney's don't want to spend any extra minute on a "file". And when they have one you better be right they want to close so most likely they will turn it on. In a worst case scenario, ask for credit to re-plum the entire house.

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June 25 2013
Great question.  I would recommend that you talk with your agent about his and see if you can get permission for you to turn the water on in your name.  This is something you would have to have written authorization about but may be worth asking for.   
Good luck
TRICIA
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June 25 2013
In this situation, lenders require the water be turned on for the appraisal inspection. You can work with your realtor to accomplish this and suggest it is on for your inspection as well. In the event a known leak is reason water is being kept off, a pressure test at source of water would be required and ensure no issues beyond walls of home.
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June 25 2013
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No water is standard on many REO sales.  YOU can often pay to have the water turned on in your name and then turned off.  You can do that again for your lender.  I would be more concerned about your lender letting it go through without a water heater which is very unlikely.

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June 25 2013
If the water heater is missing, turning on the water becomes a more complex issue. Is the house on a well? If not, are the neighbors glowing, or showing zombie like symptoms?
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June 25 2013
I have been selling real estate for 17 years and I have just started seeing one bank do this on their foreclosed homes. I believe the reason is that they are afraid there may be a water leak that could flood the home.  In fact, that is what probably happened and why they stopped letting the water be turned on. I do not believe there is anything you can do to get past this. When buying a foreclosed home, you must play by their rules. They don't realize how  this scares buyers. I think it will take the bank a while to learn that they are getting a much lower sales price for their homes before they make the change.   
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June 25 2013
It is becoming more and more common on foreclosures for the buyer to have to turn on utilities in their own name for inspections, but you stated "Water will not be turned on prior to closing," which sounds like they don't even want YOU to turn the water on. If they will allow you to turn the water on in your name, it isn't too expensive in the scheme of things and if you end up getting the house, the water will already be in your name, and you will have the security of knowing what the inspection provides.

If the inspection comes up with something terrible, you may be out $100 bucks, but better that than buying a house that may have major plumbing issues requiring thousands in repairs. But I agree with one of the previous posts, it isn't going to be toxic waste,  I would be more worried about drainage issues. See what your home inspector can tell you just by looking at the pipes, etc, or perhaps ask for a plumbing specialist to look at the house during your inspection period. 
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June 27 2013

If you are looking at a purchase where the home is being sold "as is" the water is only one of the many possible issues. Any Inspection would be for the buyers knowledge only. Buyer beware!!! If the house was not winterized properly the dollar signs will add up.

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June 27 2013
In this case the seller states the water will not be turned on prior to closing . So if you are cash buyer with a lot of experience and can buy the home at a steep discount then this could be a great deal. For most people this is not the case and the home should left for those with the knowledge and money to buy this particular home. Buyer beware!
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June 27 2013
A forclosure may not be the answer for you. There are many pitfalls and risks. As with anything in life if the reward outways the risk you may want to proceed. There is no law dictating the water must be turned on for you, in addition the bank has never lived in the home and has no responsibility to disclose anything as they have no idea what may or may not be wrong with the home.

However sometime they will allowYOU to turn on the water, but they will not allow you to perform any work on the property prior to closing, so with the missing water heater that's not going to happen.

Also, most towns will turn on water as a courtesy one day for you to do your inspection, but you will need permission to do so from the listing side.



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June 28 2013
If bank will not allow water to be turned on, you can pressure test the water lines, and if any air leaks,you can either escrow for repairs, or do a FHA Rehab loan.
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June 28 2013

If they won't turn the utilities on, then I would suggest asking if you can turn them on for inspections only.  Some utility companies will allow a buyer to turn utilities on for inspections only.  I would definitely try to get them turned on somehow. It is very risky when your are not given the opportunity to do a full inspection.  Buyer beware!!!

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June 28 2013
The bank can't turn the water on, because if they do...water is going to go everywhere and destroy the entire house.  They aren't trying to hide anything...but they don't want the house destroyed.
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July 04 2013
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You can pressurize the plumbing with a bike pump and adaptor to check for leaks.
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May 07
Its not illegal. That is typical when dealing with an REO. The very reason your getting a good deal is because there is unknowns with this type of purchase. Bottom line Risk = Reward. If you don't have enough money for the worst case scenario pass. That said if you do move forward make sure your home when you schedule the water turn on. If there is a broken pipe ect... you want to be able to cut it off ASAP. Good luck
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May 07
 
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