The Winterized Foreclosure
More and more consumers are asking about foreclosures and winterization. But, what exactly does winterization mean and what additional steps might a buyer have to take in order to purchase a winterized home?
What does “winterized” mean?
Technically it means that the home has been prepared for the winter season. However, we are seeing foreclosed homes being winterized throughout the year. When a bank or home owner gives notice to a prospective purchaser that the home has been winterized they are disclosing that water is not flowing through the pipes. And, that most likely, the home does not have all utilities in service. Many of these properties have the thermostat set at a very low temperature. There are different levels of winterization. Most banks require the highest level which includes draining the hot water tank and using a special type of antifreeze. If a home will be vacant in the winter, it is extremely important that there has been some sort of winterization to help decrease the chance of burst pipes and water damage.
What does this mean to a potential purchaser?
If a home you are interested in has been winterized, your agent needs to ask the Listing Agent who is responsible for a) hooking up utilities for inspections, b) paying for dewinterization, and c) paying for rewinterization.
Banks have started to leave the utilities in service, or the Listing Brokerage has left the utilities in service. However, if the bank has turned the utilities off at the property, the buyer may have to pay to activate utility service on a home they do not own. Some utility companies have a problem with this. The prospective purchaser will have to work through this if they want a complete inspection on a winterized home.
So, who pays for the dewinterization? I have never had a bank pay for the property to be dewinterized. The home inspector hired by the purchaser used to be able to do the dewinterization during the home inspection, but many banks were finding that not all home inspectors were qualified to complete this process. What I have seen recently is the buyer is charged for the dewinterization, but the Listing Brokerage hires the plumber. This means that the buyer can not shop around for the best price, but the Listing Brokerage is accepting more liability if the dewinterization goes wrong.
After the inspections are completed the property should be rewinterized. Many banks and Listing Brokerages will not require this if the inspection date is in close proximity to the settlement date. I, however, strongly recommend that the property get rewinterized. Water can cause catastophic damage in a limited amount of time. It is well worth the cost of rewinterization to have some piece of mind. I have seen banks pay for the rewinterization and I have also seen banks require the buyer to pay for the rewinterization.
What’s the bottom line?
Cost is a big issue for most purchasers these days. Your home inspection will run $200-$800 depending on the size of the house. Most plumbers charge $75-200 to dewinterize a home and $150-$300 to winterize. On average my clients have paid $670 to complete four steps: 1. Dewinterize property 2. Home inspection 3. Rewinterize property 4. Dewinterize property after settlement. Buyers need to be prepared for these additional costs.
Remember to always consult a local Realtor about the standard procedures in your area.
If a house is winterized and the breaker for the hot water heater is not turned off it will most likely get ‘fried’. For a house that has not been properly winterized budget for a replacement hot water heater.
Thanks for commenting Hilary! It is important that if the hot water heater has been winterized – drained of water and turned off, that before the utilities are turned back on the hot water heater is refilled with water. If there is no water in the unit, the unit will fry. This was a common mistake last year. And, is another reason to hire a professional to winterize and de-winterize your home.
I am doing a cash purchase from bank, and so far the bank has winterized the property, so when I close, I need to de-winterize it before I turn the utilities on? because since it’s a cash deal, there won’t be too many inspections, as bank is selling AS IS…
You need turn the utilities on and then have the property de-winterized. Be sure that the main breaker is off and that the water main is off, as well. You will want to be present when de-winterization takes place and monitor the pipes for leaks for several hours, as gaskets can dry out.
Hi,
I’m purchasing a foreclosure at the end of the month. The bank is selling it AS IS. The home has been winterized. Do I just need to re-winterize it? The weather here is currently 10-20..so prettyyy cold will that affect anything?What steps shoudl I take when re-winterizing?Do I turn everything on..then winterize or opposite? Thanks!
If the bank winterized the property then they most likely used a plumber to do it. I highly recommend hiring a plumber to de-winterize the property. You will want the utilities to be turned on, but you want all of the water to be off at the main. You will also want the electric to be off at the main before de-winterizing the property. If you have them on, you could fry your hot water heater or have a leak. There is nothing worse than leaving your new home for a few hours to come back to a house full of water. So, before a plumber comes out, have the utilities turned on by the utility companies, but turned off at the mains. The plumber that de-winterizes should also re-winterize it if you won’t be moving in immediately. If your weather is below 50 degrees, you need to protect the property by having the water out of the pipes.
Hello I am purchasing a home that has been winterized. the listing agent is turning on the utilities so that I am able to do an inspection. if the Home Inspector does not dewinterize the home what are the steps I need to take to get this done I close at the end of April and my inspection is not until the 16th of April. It is normally between 65-70 degrees outside does this matter?? How many hours will I need to be at the property to see if there is any problems??? Thank you in advance for any help!
I would have your buyer’s agent contact the listing agent and ask what should be done after the inspection.