I have purchased many foreclosures & corporate owned homes personally. Typically they are winterized and all of the utilities are turned off. Most of the time the buyer is allowed to de-winterize and turn the utilities on at their own cost, but then they have to re-winterize immediately also at their own cost. Ask your agent to refer you to a home inspector who specializes in foreclosed properties. A good inspector can still help with foreclosed properties.
Have you considered purchasing a Home Owners Warranty such as American Home Shield, RS Andrews etc? While I typically consider these warranties a waste of money, in this situation it may provide you some peace of mind. I have had several buyers purchase these warranties and were happy they did.
No matter what you do, prepare for unexpected costs. These homes typically sit for awhile before they come on the market. Plumbing gaskets will dry up crack causing leaks, gutters aren't cleaned causing leaks, animals may nest or chew causing electrical or plumbing issues, etc. Additionally, the previous homeowner probably didn't maintain the house knowing that he was leaving.
Finally, none of the above will matter if you can get a good deal. Homes are a steal right now, and distressed properties can be absolute giveaways. Plumbers, Electricians and HVAC guys aren't cheap, but $10,000 will repair most of your typical problems. If you can save $20,000 or more on the purchase of this home, then go for it.
The home can be inspected without utilities on, but it would be a limited inspection. I think it would be worth while but not as good as with the utilities on. Yes, there will be huge gaps in your knowledge.
I would recommend a limited visual inspection, and then have the place re-inspected if you choose to move forward. Since the first inspection is limited, I will often give a discount on the re-inspection. http://www.home-inspection-chicago.com/index.html
Yes, there will be gaps in your knowledge about the property. There are always gaps unless you personally watch every single component of the that home as it's being installed. It is obviously best to have the utilities turned on for an inspection but if that's not possible you can still glean a lot of info from a good inspection/inspector. Don't be pennywise and skip the inspection unless the purchase price is so low that it effectively indemnifies you from any major repair. I inspect vacant/abandoned properties often and it's never been a waste of time or money. Good luck!
You cannot do a complete inspection if the house has no water or heat. Do you know if the furnace or boiler that provides heat was turned off or is it actually damaged? Do you know if the water was shut off to prevent a leak from getting worse or because the home is vacant? Not until you have all utilities turned on can you test every component of a home and feel comfortable that they are working as they should. Ask for the home to be de-winterized prior to the Inspection. If that doesn't happen you've the choice to proceed or walk away from the purchase. It's all down to how much risk you're prepared to take for the potential reward from making the purchase.
Make sure you have an adequate Inspection/Attorney review Contingency period built into your contract to allow sufficient time to conduct the Inspection and address issues that arise.
Good luck, Ken.
I inspected two large multi-family homes in Bucktown yesterday that had extensive termite damage in their crawls. One in 15 sounds like a high estimate for the percentage of homes in the city proper with termite activity but they are by no means rare. Best of luck in your new project.
We are mostly concerned about the BIG repairs. Roof, foundation, wiring. Obviously gas and plumbing is a problem though :( It is a really good deal (still don't know if we got it), baring really huge repairs, though. We have some experience with fixing up, as long as it's not something like replacing a roof or fixing all the plumbing.
This is an 'as is' property, so we won't even have a lead paint or termite disclosure (are termites a big problem in Chicago?).
You owe it to yourself and your family .
Be protected not mis-directed.