HUD Home inspection problem. No utilities.

Asked by Am, Grand Rapids, MI Wed Aug 3, 2011

I am bidding on a HUD home. The plumbing does not hold pressure. The water cannot be turned on for inspections. My lender requires all utilities on for inspection Does anyone know of a resolution for this or should I withdraw my bid. My Realtor's answer was to switch to a lender of their recommending that would not require the utilities to be on for closing, but I am not comfortable with that.

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Cbennet321, Home Buyer, New York, NY
Mon Oct 24, 2016
My children were searching for VAR 600 E this month and learned about a company with a huge forms library . If people need to fill out VAR 600 E too , here's
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Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Thu Aug 4, 2011
You are very likely correct - but I have never had a buyer not been able to get permission from HUD to turn on the utilities before. If I was in your shoes I would demand your agent write up an addendum proposing the seller grant the buyer permission to get the utilities turned on at buyer's expense - worst case is HUD says no. You won't know what they say until you get it in writing from them, I would not accept a "verbal".
0 votes
Am, Home Buyer, Grand Rapids, MI
Thu Aug 4, 2011
Thanks for your responses. I am aware of the fees and willing, to pay but it looks like if the water can not be turned on this is a cash only property in essence.
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Brian Rayl, Agent, Dallas, TX
Thu Aug 4, 2011
In the state of Texas, the buyer is responsible for turning on utilities for inspection. It should not say that you CANNOT turn on utilities, simply that HUD will not do it for you. Unless you are paying cash, you have to have utilities on for an inspection. If HUD is refusing to allow you to pay for this service, then you will (almost) never get a loan for that home.

If HUD is refusing, move on. Otherwise, pay for activation and get your inspection done. If you don't want to pay this fee, then look for a non-HUD home.

It's more than real estate. It's RAYL-Estate!

Brian Rayl
Keller Williams Elite - Dallas, TX
0 votes
Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Wed Aug 3, 2011
This is a requirement for nearly all loans - utilities to be on at the time of inspection (definitely, without a doubt, a requirement for FHA loans). In my opinion your agent is a pansy and needs to negotiate/get permission from HUD in order to turn the utilities on. I believe in Michigan normally there is a fee to turn utilities on, so you may need to pay that fee as well since HUD isn't going to be paying for anything like that.
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