Are you buying a HUD home? You need to use caution and read this information!!

Many people look to HUD owned homes as a way to get a good deal.  But what you don’t know might well cost you much more than you thought!  Read on to learn how to be prepared and protect yourself before you make an offer on that HUD home.

[tab: The Process]

There are all kinds of advertising going on about HUD repossessed homes and how they are such a great deal to be had.  Even HUD itself has what they call a $1 sale on homes.  There are some very good deals to be had in these homes but what you don’t know can possibly cost you A LOT more money for that home than you thought!  You need to be aware of this one major issue with purchasing a HUD home before you even consider making an offer on a HUD home.  Before we discuss the issue that can really trip you up we will talk about how HUD homes are handled.

When you purchase a home through a regular sale (owner decides to sell) or even through a non HUD/FHA bank repossession (owner loses home and bank puts it up for sale) the process is relatively simple.  However when HUD gets involved in a home you are headed for a lot of bureaucratic red tape and procedures/policies so convoluted even the best Real Estate Agents can get frustrated dealing with it.  This is a high level description of the processes that take place with a standard non HUD/FHA repossessed home Vs. A HUD home.  There are many more steps and procedures involved in both but they are not important to the discussion of the problem with HUD repossessed homes we are going to discuss so they are left out to prevent muddying the waters.

Non HUD/FHA bank repossessed home sale steps.

  1. The bank forecloses on the home and takes possession.
  2. The bank hires a real estate brokerage company to handle the management of the home from the time of repossession to the time of sale.
  3. Either the bank or brokerage will have the utilities shut off and disconnected.
  4. The brokerage hires a property preservation company whose job it is to go to the home, check it out, rekey locks, perform any necessary for safety repairs, secures the home, and depending on the bank and time of the year they will perform a full “winterization” of the property.  Winterization is the process where the home is prepared to sit empty, without utilities turned on to prevent damage to the homes systems.  Typical winterization steps are as follows.
    1. All utilities are shut down by the utility companies.  That includes gas, water, electric, etc.  All main valves for these utilities are secured so they can not typically be turned on again without intervention by the utility company.
    2. All of the breakers in the main breaker panel are shut off included the main breaker.
    3. All gas valves at individual appliance locations are shut off to preclude leakage if the gas utility did not remove the meter and/or properly cap the pipes at the meter.  If a main gas valve is present after the gas meter and outside of the home, it too is turned off.
    4. Since no heater is functional (no electric or gas for it) the plumbing system is winterized to prevent freeze damage, or other damage such as seal failure, to it.  The lines from the water meter to and through the house are purged of water and all valves at individual fixtures are turned off.
    5. The water inlet valve to the water heater is also turned off.  The water heater is fully drained to prevent freeze damage to it.
    6. Toilets are all flushed to empty their bowls and tanks to prevent freeze damage.
    7. Toilets, tubs, showers, and sinks all have traps in them to prevent sewer gases from the waste system from backing up into the house.  When the water is shut off and these fixtures set for long periods of time the water in the traps will evaporate and the trap is now open to gases from the sewer.  To prevent this an environmentally safe antifreeze is poured down into the drains to fill these traps back up.  The antifreeze lasts a long, long, time and will not evaporate.
    8. Now that the home is properly winterized signs will be taped up all over the house over toilets, in sinks, on water heaters, on the electric panel, etc., warning that the home has been winterized.
  5. The house is placed on the market and a buyer comes along making an offer to buy.  Part of the offer is that the home be dewinterized so the buyer can perform a proper home inspection.  Typically the buyer pays the seller (the bank) a fee to have the home dewinterized which includes reversing all of the steps in number 4 above except possibly reconnection of the utilities by the utility company.  The buyer might have to call the utility companies directly to have this done and pay deposits, etc.  The buyer might also be required to pay the seller a deposit to have the home winterized again if the sale falls through.  For the dewinterization who does what, how much you pay, who pays what, is all negotiable as part of your offer to purchase the home.
  6. The home is dewinterized, you have your inspection and either proceed with the purchase or some point along the way cancel the purchase and the home is winterized again.

The process with a HUD home is a little different but very important when it comes time for you to make an offer.  I will not repeat everything above but will refer to the steps above as needed.

  1. HUD takes possession of the home during the repossession process.
  2. HUD contracts with businesses to handle the management of the property from the time HUD takes possession until the property is sold.  These are regionally based, private firms that HUD calls “Real Estate Asset Managers” or REAMS for short.  HUD assigns the property to the REAM immediately after they take possession.
  3. The REAM will handle steps 3 & 4 above as well as periodic maintenance and checks on the home until it is sold.  The REAM might subcontract out the property preservation duties or they might have their own group of people to perform this.  Typically the REAMS are large organizations, possibly located in another State from the property, and most REAMS subcontract out all of the maintenance and property preservation duties to yet another company called “Property Preservation Specialists”.
  4. Once the property is ready for sale it is listed on the HUD listing sites.  If HUD deems appropriate it is handed off to a licensed Real Estate Brokerage to list the home on traditional real estate listing sites and handled through them and the REAMs.

I have stopped the steps for a HUD home sale because the process of buying a home through HUD is convoluted and confusing, even to some veteran Real Estate Agents.  It is after the point that the home is listed for sale that the problems to the buyer come into play.  We will talk about one major problem in the next tab so read on.

[tab: Problems]

The root of the problem is that the home is owned by the government (HUD) and quite frankly the government is not to awfully concerned about anything except selling that home and getting it off of their inventory sheet.  Because of all of the bureaucratic red tape, policies, procedures, and their need to “dot the i’s” and “cross the T’s” they are inflexible and will err on the side of procedure and policy rather than reality.  That is where the main problem comes into the picture.

HUD has relatively little policy and procedure in place to protect the consumer when they are buying a HUD home and it is not being financed by HUD under the HUD 203K program.  In short the 203K program is one where you can buy a HUD home that requires extensive repairs and finance the cost of the repairs into the same government backed loan (203K loan).  Homes that are flagged as eligible for 203K loans have already been determined to have significant enough problems that they do not meet the “Minimum Property Standards” as defined by HUD.  Properties that are going to be insured by a HUD entity, such as FHA and their loans, must still meet the minimum property standards but do not enjoy the consumer protection of the 203K program.

The single biggest liability and expense to you, the buyer, is after you make your purchase offer and it is accepted.  Almost invariably the home has been winterized and to perform a proper home inspection the home must be dewinterized.  Unlike a home being purchased under the 203K loan program, HUD has no procedures for how, when, and who will perform the actual dewinterization.  As a buyer it is expected that you will pay the cost associated with this but did you know you also are required to dewinterize the home?  Did you also know that you will be submitting an approval request to the REAM to allow you to perform the actions of dewinterizing the home?  You will also be required to submit a payment at that time to be used to rewinterize the home after your inspection period is over.  Most importantly did you know that when you submit that request the REAM will demand that to approve the request YOU, the buyer, must assume all financial responsibility for anything that happens to that home from the time you dewinterize it to the time it is rewinterized?  I can find no HUD procedures or requirements in place to control what the REAMs do or demand from you.  I have even asked HUD and the FHA and they can provide no such guidance they have written.

Understand this, the REAM is going to limit their exposure to liability for the property.  HUD holds them responsible for anything that happens to the property through their negligence.  Out of necessity to protect their thin profit margins from HUD they will try to reposition the liability elsewhere.  These are an example, and a typical, set of  statements that you will find in the agreement you sign and submit to the REAM for approval to dewinterize the home.  This came from the form of one specific REAM but the same general statements are found in many of the REAM’s permission forms.

No utilities may be activated on any HUD properties without prior written permission from “XXX REAM”. Utilities must be activated by the potential purchaser and/or their agent and discontinued within 72 hours. Failure to obtain authorization prior to utility activation will result in cancellation of the sale and forfeiture of the earnest money deposit.

We the undersigned understand that in so doing, we shall be liable for the payment of any and all connection and disconnection fees and/or utility usage charges resulting from this activation request and/ or the resulting system check.

We further agree to assume full responsibility for any damage to the above-designated property, and/or any neighboring or adjacent property resulting from the requested utilities activation and/or systems check.

We further agree to take proper care of any and all appliances affected by the utilities activation and systems check, and specifically agree to ensure that all hot water heaters in the above-designated property are full of water before turning on electricity to be certain not to burn out the elements.

Some REAMs might have you pay them to perform the dewinterization and rewinterization after the inspection period.  What appears to be common though in Texas is the requirement above that states the buyer, and their Agent, will perform the dewinterization.  What is just as important, but the potential costly part to you, is the highlighted part above where YOU, and potentially your Agent, take responsibility for any damages that occur to that property from the time utility activation starts until the rewinterization process ends!  It also leaves it up to you to have all utilities turned on, main valves activated, valves at all plumbing fixtures turned on, all electric activated, the water heater properly filled and the heating source to it turned on, etc., etc.

WOW!  If you don’t understand what that means think of it this way.  Once the utility activation starts you basically own any and all problems in that home until the rewinterization is completed.  Here is what you need to consider and where things can go wrong.

  • If the home was not properly winterized to begin with there could be problems that do not show up immediately when the home is dewinterized.  For example an existing slow leak in a water pipe can easily go unnoticed until hours after the dewinterization of the plumbing system is performed.  Another would be a water heater that was turned on but took more time to heat up than anyone was on site for the dewinterization process.  Later that evening the seals fail and the water heater leaks all over the house.
  • Even if the home was properly winterized conditions can occur that damage components or systems while it is waiting to be dewinterized for the inspection.  If these problems appear during the dewinterization it is easy to blame whoever was performing the dewinterization for them.  In essence you potentially bought the repair bill for them.
  • If anyone performing the utility activation or dewinterization processes damage the home you have agreed to pay for those damages.  HUD, and the REAM, are not going to chase down anyone else.  After all you have signed and agreed to be responsible for them.
  • You as the buyer do not have control of that house at any time between the start of dewinterization and the completion of the rewinterization.  It is against HUD policy to allow you free access to that house at any time you want without being accompanied by your Agent.  In other words you have no control over who might do what during that time frame.  These homes are many times equipped with a combination lockbox to hold the door key, and it keeps no record of who accessed it.  Many HUD homes are keyed with a master HUD keyset that works on many other homes as well.  These keys are not controlled tightly and any number of people could have access to the home.
  • In the case of the statement above if anyone accessing that home or property was to cause any damage to neighboring properties you could potentially be held liable for that as well.  An example would be if the neighbor next door claims damage to the sprinkler system in the yard that borders your property they could try to make a claim against HUD for this and you would be on the hook.

There are so many things that can occur or go wrong during this process that you must take some precautions regarding this.  HUD does have their REAMs perform condition inspections on the home not only when they first repossess it but also periodically until it is sold.  I’ve seen these reports, and you will have access to at least one the initial report.  Quite frankly I have found many discrepancies in these reports that certainly make me wonder if they were not just pencil whipped just to say they did inspect it!

HUD makes you jump through so many hoops to buy a HUD foreclosed home, and yet they do not appear to work to help protect you.  On the next tab we will talk about how you can help protect yourself to prevent owning problems that you do not create as a result of this forced liability.

[tab: Inspector’s Role]

Many purchasers of HUD homes understandably have little or no knowledge of the process and the pitfalls of dealing with HUD.  The buyer is most times not aware of this forced requirement for the buyer to handle the dewinterization of the home until after they have made the offer on the home.  By then they have already started their option period and are scrambling just to gather the utility company information, find a Home Inspector, coordinate all the other aspects of the transaction, and handling their daily lives.  It becomes a chaotic mess for them!

It is the job of the Real Estate Agent to guide the HUD home buyer through this process.  That guidance starts well before the buyer even makes their offer on the HUD home.  However many Agents either do not know the process for purchasing a HUD home or are too afraid of losing a client and a sale to take charge and properly handle the situation.  All to often the Agent advises the buyer to have the Home Inspector perform parts of the dewinterization such as turning on those main water, gas, etc., valves, turning on the valves for all of the sinks/tubs/showers/etc., turning on water heater valves, activating water heaters, gas pilots, main and sub breakers in the electrical panel, etc., etc.  The Agent then sends the buyer on a hunt to find a Home Inspector who is, in my opinion, to stupid (not ignorant as there is a difference) or hungry for work and willing to to do this!

As a buyer who is assuming the liability for what occurs you are taking a HUGE chance by taking the approach of allowing the Home Inspector to perform the dewinterization steps.  The buyer needs to remember the liability agreement they signed with the REAM that no matter what happens the REAM is coming to you and not the Home Inspector!  Again that leaves you hanging in the wind because now you will have to go after the Home Inspector if you think you should not pay for any damages.

“No problem” you say as you have been told the Home Inspector has insurance to cover this, right?  WRONG!! Home Inspectors carry mandatory Errors & Omissions insurance to cover them in the event they make an inspection error such as a bad call on the condition of something within the home.  The omissions part is if they omit something important from the inspection and report.  E&O insurance does not cover physical damage to the home, or surrounding properties.

There is a second insurance that Home Inspectors can carry, it is not mandatory, so many do not.  This is called General Liability (GL) insurance.  GL insurance covers a Home Inspector in the event they cause damage to the home during the course of their normal home inspection duties.  For example they fall through a ceiling, or back their truck into a garage door, etc.  The normal duties of a Home Inspector does not include activating any decommissioned systems or components for the purpose of inspecting them.  In other words water must be present to a normal fixtures faucet handles, water tanks filled and heating source on, all breakers on, gas valves on up to and including the appliance being tested, etc., etc.  You can read the normal requirements for a Home Inspector here at the “Complete Rules Governing Inspectors” which are mandated by the State of Texas.  For those of you reading this from out of the State of Texas these are the same general requirements in most other licensed States as well.

The functions of dewinterizing a home are covered by an entirely different category of GL insurance.  This type of GL insurance falls under the functions and duties of a Property Preservation Specialist.  Property Preservationists are the ones who generally perform the winterization and dewinteration for the banks and HUD.  They handle these homes day in and day out as well as perform physical tasks on the home.  As a result their insurance premiums are very high and so are their coverage amounts.

“O.K.  So I can’t go after the Home Inspector but I can go after my Real Estate Agent, right?”.  Most likely the answer to that is going to be NO!  What you need to ask yourself is di your Real Estate Agent give you some written direction to proceed on your own, without using a Property Preservationist, plumber, electrician, etc., to perform the dewinterization tasks?  If you have written proof of this then yes you could potentially make a claim against their E&O insurance, IF they carry E&O insurance.  In the State of Texas Home Inspectors are mandated to carry E&O insurance but Real Estate Agents are not.  It would be foolish for an Agent not to carry E&O as their rates are a great deal cheaper than the Home Inspector.  But there are Agents that don’t.  You will also most likely find that no Agent seems to even consider carrying GL insurance as there is typically no need for it for an Agent.

The most important consideration you have is not who can be tagged for the damage later but do you even want to have to go through the aggravations?  In the end you still have to answer to the REAM and then chase after someone else.  The probabilities of something happening are unknown during the time you assume liability but they are possible.  If you demonstrate great prudence and care in how you proceed then regardless of what happens you can always significantly reduce your liability and place it where it might belong which might not be on you.

[tab: Solutions]

I am not by any stretch of the imagination telling you not to buy a HUD home.  There are deals to be had out there.  I just find it ironic that HUD advises all buyers “For Your Protection: Get a Home Inspection” but then makes it difficult or potentially expensive to do just that.  With the homes sold under the 203K loan program HUD does require the selling Brokerage and/or the REAM to dewinterize the home so the buyer can inspect it.  In addition the 203K program has a forced set of inspections required by HUD, more to protect their loan investment than the buyer’s interests.  Yet for all other homes the buyer is left hanging out in the wind.

So what can you do to help protect yourself since you will not have any choice but to sign these ridiculous liability assuming documents?  Mind you I am not an attorney so all I can offer are my opinions on how I would approach this to help protect myself.  It starts before you even make an offer by preparing, and continues through until the time the home has been rewinterized.

Of most importance is that you DO NOT perform any of the steps needed to dewinterize that home!  Don’t even do the simplest step of flipping a breaker in the electric panel or even turning on valves under sinks, tubs, toilets, etc.  As soon as you lay a hand on that property it does not matter who did anything else you’re the one that will be blamed.  Why?  Well it is easier to blame you since you signed the liability agreement than it is to blame anyone else.  Most likely you’ll be blamed anyhow but the steps ahead help you limit your exposure to liability.

The first step is to prepare for the offer before you even make it.  That starts with understanding what it takes to dewinterize the home.  To dewinterize a home, and have it ready for the inspection, the following needs to be performed.  This is not an exact order and will be dictated by the conditions and other requirements.  But all of these should be done before the Home Inspector arrives.  It is best to have this done 24 hours prior to the inspection.  In that way you can check the home the evening before the inspection for any significantly obvious problems and cancel the inspection if need be and save your inspection fee.

  • The water must be turned on to the home and all of the way up to and including the individual supply valves for plumbing fixtures and the water heater.
  • The water heater should be filled and its heat source turned on.
  • The main electrical breaker should be turned on and all breakers in the panel activated whether they are used or not.  If there are sub-panels in the home they too should be fully activated.
  • The gas should be on in the home and all gas valves at the appliances should be on if the appliance is installed.
  • Any appliance that has a pilot light that is constantly on (non-electronic ignition) should be lit.  Do not light the fireplace gas log starter unless it has a standing pilot light for the wall switch style units and then only light the pilot light.
  • If it is cold out, or will be cold overnight, then the heating system should be on and recommended set no lower than 68 Degrees.

Next find out who provides the utility services for the home.  Call each of the utility service providers and explain your situation and ask not only they require to temporarily turn on the utilities,  but also what steps they take when turning on the utilities.  Don’t forget to ask what it is going to cost you?  Here is a list of the utility companies by type, and what they typically do under this circumstance.

  • Water company – Many times the water is only turned off out at the street side water meter by turning the main valve.  When the water company arrives they will activate the valve and watch the flow meter and leak detector dial to see if water is flowing since they usually have no access to the home.  Even if the home is accessible they will generally not touch anything beyond their water meter.  They will allow “X” number of gallons to flow as they are expecting “X” gallons sufficient to pressurize the piping in the home.  If more than “X” gallons flow, and no access is available, they will shut the water back off and report it.  If the home is accessible, and someone is there, they will report it to them and allow that person to make the decision to leave the water on.
  • Electric company – Each electric utility provider is different in how they handle activating the power.  As a general rule though expect them to want access to the home as significant electrical problems can cause fires and they don’t want that responsibility.  Typically the electric company will access the home to ensure the main breaker is off.  The electric meter is usually not in place for many winterized homes.  They will then install the meter and ensure it is not registering any current flow with the main breaker off.  They will check the electrical ground if one is exterior to the home.  At that point they are done and you are left to activate the main breaker and all branch circuit breakers.  If the home has a smart meter the electric company, when possible, will activate it remotely if it is present.  How they handle the presence of immediate current flow varies and they might or might not shut it back off.
  • Natural Gas Service – The gas company will require someone to be present to open the home.  For safety of the resident and the gas system they will usually perform a quick visual inspection of the gas appliances and make sure there are no apparent unsafe conditions with them.  If there are they will red tag the appliance and go no farther.  If the appliances appear safe they will make sure the gas valves are off at the appliances as they should already be.  They will then go outside to the meter and if connected will disconnect it.  They will put a pressure measuring set on the line into the home and run a pressure check of the gas system from there and effectively through the home.  If they detect a problem they are finished and will not activate the gas.  By the way this is one advantage to purchasing a winterized home as you get a semi-free pressure check of the gas delivery system.  If the pressure is fine they will connect the meter and turn on the gas.  At that point they are finished and you will be left with turning gas appliances back on and lighting pilot lights.  If you ask some gas companies will do that for you and if a problem is detected they will then red tag the appliance and shut the gas off again.

As you can see from the above typical utility company steps you will still have the responsibility to turn on main valves, valves at plumbing and gas fixtures, light pilot lights, fill water heaters, turn on electrical breakers, etc., etc.  Any intelligent Home Inspector is not going to do these things and is going to advise you not to do them!  The potential for problems is there along with potential actions by a disgruntled former homeowner, or a property preservation person who feels they were mistreated or not properly paid, etc., etc.

The sale documents for the home will usually show who the assigned REAM is for that property.  Find their WEB site and look up the form they will require you to sign for approval for the dewinterization.  All of the REAMs sites I have seen will have the document available.  Look to see what the requirements and conditions are for this activity.  All of them will generally require you to pay a deposit to have the home rewinterized.  I have only seen one where the REAM required the buyer to submit an additional fee for the REAM to dewinterize the home.

If the REAM is going to require you to perform the full dewinterization of the home then you need to seriously consider hiring someone to perform the steps not performed by the utility companies.  Call the REAM to see if they offer that service for a fee.  If they don’t then they might give you the name of the “Property Preservation” company that they use for these services and would approve of.  I would highly recommend that you use the REAM or their Property Preservation company to perform the service.  It is simple logic why as well.  The REAM and/or their Property Preservation company winterized the home and/or will rewinterize it after your inspection.  So if during the dewinterization process something happened due to improper winterization, or the REAM not performing and catching problems during their management of the property, it would be easier to push the responsibility for any damages back on them.

If you are not able to use the REAM or their Property Preservation company you need to ask the REAM who they deem acceptable to perform any of the dewinterization steps that the utility companies do not perform.  The REAM might approve of a Property Preservation company or might require you to hire the services of tradespeople such as a plumber.  At this point you might think “Well hey, since I have a plumber in (or other tradespeople) then why not just have them inspect those areas and not hire the Home Inspector.  You can certainly do that but it will cost more than just having them in quickly to perform whatever action is necessary to activate that system.  If you do pay them a fee to perform that part of the inspection then make sure you receive a written report of the full condition of the system.  Do not rely on, or pay for, just a verbal condition statement.  Remember later on if something obvious was missed you want to hold them responsible for their failure.

Once you find out what the REAM requires your Real Estate Agent should have a list of property preservation companies, or tradespeople, to handle the dewinterization needs.  If they don’t then they most likely do not handle many, if any, property purchases of winterized homes.  Even if they don’t have lists then they should be able to network with other Agents that do have these lists.  Call these various people and find out what their fees are and at point point you should call them in.  For example it makes no sense to call in the plumber until the main water has been turned on, or the approval is there and the plumber can turn it on.

Once you have the list of people to perform the dewinterization steps you need to do one more thing when speaking to them about their fees.  You need to ask them what insurance they have to cover themselves in the event they make an error on the property that causes damage?  Obtain a copy of their insurance certificate and call the insurance company to verify the policy is actually in effect and current?  A good property preservationist or tradesperson has nothing to fear if they are confident in their abilities, and hence they will provide that information willingly.

At this point you are now ready to make that offer on a HUD home.  You know how the process works and have all the key players ready to make your move.  But you’re not quite done yet in making sure you limit your liability.  The next section is as important as this one.

[tab: The Big Day]

First let’s start with an actual example of what can possibly happen, and why you or the Home Inspector, should not touch these things, is a home that had been dewinterized a month ago for an inspection I performed.  This was not a HUD home and the bank had it dewinterized for the buyer to have their inspection.  When I arrived it was 45 Degrees Fahrenheit outside and a quick check outside, before entering, showed water seeping out of the bottom of a brick wall near a bathroom and right next to it the exterior HVAC condenser unit was running full bore.  Upon entering the HVAC system was set in the cooling mode and 52 Degrees.  In the master bathroom the toilet tank was overflowing and had flooded the bathroom and extended out to the master bedroom and closet.  Later while inspecting the rest of the home one of the bedrooms had no electric to it and the breaker controlling it was in the off position.  A check of the wall light switch showed all of the electrical wires disconnected from the switch and tied together.  Was it sabotage?  I have no idea but consider what liability the client might have been exposed to if they had performed any of the dewinterization steps?

Again keep in mind that you are signing an agreement with the REAM stating you will assume liability for anything that happens in that home from the start of the dewinterization to the end of the rewinterization process.  You are not going to be given a key to your potential new castle and certainly not given sole access ability.  Most times you can schedule all of the players to be on site the same day to perform their various functions to dewinterize the home.  Plan on being there, with your Agent, before any of them arrive and after the last one has left.  Protecting yourself here is an easy step but it does take some effort and a digital camera.

Before anyone arrives perform your own check of the property for damages.  Whether there are damages or not take plenty of pictures for proof of damages and general photos of the homes interior and exterior.  Make sure your camera’s date/time stamp is correct and start with a shot of the front of the house.  Even if you don’t need them for protection they can help you remember the place as it is and prepare for your move in and settling in tasks.  Keep a journal that day of who comes and goes, what for and the times on site.  Before each person leaves check their respective areas for completed work and any damages.  If damages are there immediately take pictures and make sure they are aware you know the damages were not there before they arrived.  Make sure your Agent is immediately told and shown as well since they should be escorting you in the property.  When everyone is done, and you have no more photos to take then take one last picture of the front of the house.  Between that time and the inspection day if you visit the home then make sure you perform a damage check and look for problems and things out of place from when you were there last.

After the inspection ask the Home Inspector to stay for a short while longer while you take another set of pictures.  You will most likely not be in the home again before it is winterized again.  These are to show no issues existed the last time you entered the home.  If during the home inspection problems arose and utilities had to be shut down, or parts of systems had to be shut down to prevent potential damage then make note of that as well.  If this occurs immediately notify your Agent via email (a written record) to have the listing agent or REAM notified.  I will do this as an Inspector but you might not be using me for the inspection.  The key is immediate notification of the listing Agent and/or REAM so they know and can have it attended to promptly.

At this point you have, for the most part, done everything you can to protect yourself and limit your liability in buying a HUD home.  There are some very good deals to be had out there but not if they cost you significantly more due to issues well beyond your control!  It does take a little work in getting the good deal but quite honestly nothing comes as free as others would like you to believe.

[tab: Links and References]

PS Inspection & Property Services LLC is a full service home inspection and light commercial inspection company servicing the entire Dallas/Fort Worth metroplex.  We strive to for the satisfaction of our customers in everything we do.  Our services offerings include:

Buyer home inspections
New Home Warranty Inspections
New Home Draw Inspections
Home Maintenance Inspections
Home Remodeling Inspections
Investor Inspections
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Infrared Thermal Imaging Inspections
Energy Audit Inspections
Whole Inspections Or Inspections Customized To Your Needs

If you have an inspection need we can customize an inspection for it.  Please visit our main site at PS Inspection & Property Service LLC.

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