It looks like the bank came to their senses, and are willing to drop the price of The Yellow Stain House considerably. Not quite the $20K that I originally asked for, but they’re willing to reduce the price by $14K. This price reduction would cover the extra costs undercovered during the inspection: the foundation issue, the plumbing issues, and the roof/rafter issues.
So, given that, and given that I liked this deal to begin with, we’re going to move forward with purchasing The Yellow Stain House. Given that we have no additional due diligence period, we’re hoping no new issues arise, but the fact that we’ve already had a full inspection, I’m hopeful that there’s nothing else we’ve missed.
Time to go turn the utilities on…again…
Now, back to my vacation…
You don’t sound that convinced this is a great deal with the number you have today. Just a warning, make sure you are not doing the deal because you have nothing else to do. I made that mistake and it was a very expensive one.
Is this property fitting your rules with the current numbers?
Actually, I am excited about this deal…I just don’t want to sound too excited, in case the agent is reading my blog (haven’t signed the final contract yet)…
Whoops…just gave it away…
🙂
Seriously, I’ll be more excited once I get confirmation of the estimates for the foundation and the plumbing issues. Once I get those estimates nailed down, I’ll probably be very, very happy…
Question for you, what does it cost to have the utilities turned on on a REO? I want to do an inspection on a possible purchase but don’t really know where or how to begin. Do I just call the utility companies and request that they turn them on for a day? Please advise and forward the answer to my email. I really appreciate it!
Hi Katrina –
It can generally be handled one of two ways:
1) Often, the contract states that the seller (the bank in this case) is responsible for ensuring that the utilities are turned on for the buyer to do inspections. That said, many banks will have you sign their own contracts as part of the deal, and those may specify that to have the utilities turned on, you need to pay something like $150-250 in non-refundable fees (I guess this is how much money it will take to get the bank representative off their butt to call the utility company). So, you can pay that fee, and the seller/bank will have the utilities turned on; or,
2) You can call the utility companies yourself and have the utilities turned on in your name. This may mean paying refundable and/or non-refundable fees to the utility company, and also will require you to turn the utilities off when you’re done (unless you want to keep them on through your closing date), and will require that you pay the bills as long as the utilities are on, but this will often be much cheaper than paying the bank fee.
Personally, I just have the utilities turned on in my name from the date I have the property under contract. I’ve never had an issue with this, though it requires some phone calls and logistics for potentially being around when the utilities are turned on.
The only thing to watch out for is to ensure that there are no unpaid utility bills from a previous seller that you’ll be accountable for. In GA, the utility company can’t make you pay back-owed bills for past sellers, but it may be different in your state.
This whole issue is an annoying one, but just part of the deal when it comes to buying REOs.
Hope this helped!