I side with you but banks are not required to have utilities on at an inspection. If the property is an REO, sure but a foreclosure/short sale it would be up to the seller. Mind the seller's agent should confirm this and not the inspector showing up at the property. Their are short sale facilitators that can expedite the process. 2 months seems reasonable and 4 months worst case scenerio. Despite how buyers may back out I think it's important to be working with a listing agent that communicates frequently through this frustrating process. Many foreclosure agents I have worked with do a poor job of keeping the buyer's agent updated on the foreclosure process. We all can relate to the issue of it taking time (banks having to loose 100-500k for giving a poor loan-has to leave these investors frustrated) but when the listing agents at the other end with the offer do not keep the buyers and buyers agent updated that is where we lead to buyers backing out.
The Carrabba Group
Keller Williams Hollywood Hills