Does this sound familiar? You represent a buyer, and you have an accepted offer on a lender-owned property. In their counter offer, the lender stated that they are not responsible for utilities, and if the buyer wants utilities turned on, they must do it themselves. So, that puts you in the position of either helping the buyer do that, or worse, you do that for them.

Here's the rub… neither you nor the buyer own that house, and really do not have authority to enter the premises and turn on utilities. Yes, the lender said in their counter that they would turn them on, but still, that puts the buyer and the agent in a real bad position, since the lender technically did not authorize the buyer to turn them on, nor does the lender indemnify the buyer if something goes wrong.

Case in point… Buyer's agent arranges for water and electric service to the property. Buyers FHA appraisal required the pool to be filled and running. Agent shows up the afternoon both of those services were to be set up. He sees the water meter, turns on the main valve. He then turns on the main circuit breaker to the house. The agent proceeds to his car, picks up the hose in his trunk and walks to the rear yard. He connects the hose, turns on the faucet and drops the hose in the pool. He then returns to his car and sees water running down the driveway. This all occurred in about 7 minutes. He immediately turns off the main valve, goes through the front door to find most of the downstairs flooded. Someone left the hot and cold faucets for the washing machine in the laundry room turned on, and when he turned on the main valve, that immediately started flowing. By the time he realized it, the house had a good inch or two of water everywhere.

Who pays for the damage? The agent, and his broker, and their E & O carrier. The agent damaged someone else's property, so the agent would be liable, and technically, entered that property without authorization nor indemnity.

I heard of another case where a previous occupant left wires crossed in a ceiling when they pulled out a ceiling fan. By the time the agent got into the house, the crossed wires sparked before the circuit breaker shut it off, and that spark ignited something in the ceiling. By the time the agent realized it, the entire ceiling was on fire. Again, damage in someone else's property that the agent caused, thus; the agent, his or her broker and their insurance carrier will be liable.

Bottom line… as a buyers agent, stand your ground and either require that the seller have all utilities on for inspections and walkthrough, or cancel the contract. When enough buyers cancel these deals, the lenders will realize their obligation and turn on utilities in the properties they own.