It’s May, so why are bank-owned properties still “winterized”?
May 2, 2009 by Danilo Bogdanovic
Filed under Foreclosure/REO properties
Many folks are wondering why foreclosure/bank-owned properties are still “winterized” even though it’s May. After all, winter is gone and spring is here. Well, the main two reasons banks are still “winterizing” properties is to cut carrying costs and limit potential damage to the property.
“Winterization” by definition is the process of preparing your irrigation system for winter so that the pipes don’t burst due to below-freezing temperatures. The term “winterization” in real estate has evolved to also include,
- turning off the water supply to the house
- draining all the pipes inside the home including the hot water heater
- turning off the electricity and gas supply
The bank has expanded it’s ”winterization” process to include some or all of these things for a a variety of reasons, two of them being,
- To save money by not paying utilities
- Minimize potential damage to those systems which could/would otherwise be on from the time the home was foreclosed on to when it was sold.
Not all properties are “winterized” in the above way. Countrywide for example, has the listing agent/broker put the utilities in their name prior to the property going up for sale and through settlement day. Countrywide then reimburses the listing agent/broker the cost of those utilities at a later date.
But many banks don’t follow this process and just have everything turned off. If you aren’t sure whether the property has been winterized or not, you’ll know the second you walk in the house. If it’s below or above room temperature, the lights don’t turn on and/or there’s blue tape on the sink and the toilets, it’s been “winterized”.
I wonder how often this “winterization” results in flood damaged basements. During the spring rains many houses around here can’t go long without a functioning sump pump.
Mike - Good point. I’ve seen a several that had pretty bad water damage in the basement, but they were mostly older homes that didn’t have french drains or a properly graded lot.
Remember the really bad rains we had a year or two ago where many people’s sump pumps burned out because they were on so much and the local Home Depot and Lowe’s were sold out of new sump pumps? There were many bank-owned owned homes that had pretty bad flooding in the basement that week.