Septic Issues Can Flush A Deal

Posted by Deborah Powell on Monday, January 27th, 2014 at 12:15pm.    14732 Views

Septic Issues Creating Home Buyer and Seller Blues

It seems lately all of my transactions have a septic system issue. This creates some stinky situations! In a perfect world, every homeowner who has a  septic system would know where the tank is, have it cleaned on a regular basis and have the system inspected before listing the property for sale. Currently, two of the four counties I service regularly have a required Point of Sale Inspection on septic systems.

In Geauga and Trumbull counties, a septic system must pass inspection before a property can transfer to a new owner. What if an inspection cannot be performed due to snow cover, inclement weather or the house is vacant? Typically, the seller can escrow between one and one and a half times the amount of a replacement system, close the deal and the inspection can be done later. In Lake and Ashtabula counties, there currently is not a mandatory Point of Sale Inspection on septic systems. However, that does not  mean a potential buyer will not want an inspection or a lender won't require one. Unfortunately, more often than not, when I am at a listing appointment with a seller and this subject comes up, the discussion is either vague or not promising. 

I am always amazed at how many homeowners cannot remember the last time they had their septic tank cleaned out. This is question 2 on page 2 of the Ohio Residential Property Disclosure Form. Many times the seller will say, "we have never had a problem" and they offer no information on the disclosure. This could potentially lead a  prospective buyer to believe they are purchasing a property with a good septic system.  Or, the buyer may be suspicious due to the lack of information and feel that they definately need to have the system inspected. So, the buyer and seller enter into a contract that is subject to a septic inspection. Here's where the fun really begins.

Selling a Home, Deal Killers

Let me give you a few scenarios of potential deal killers. The inspection results show the system failed so now the buyer wants the seller to pay for a new system. The seller does not want to pay for a new system as this will cut into their proceeds. Or,  perhaps the buyer has the septic inspection done by someone who is not an expert in this field, a  licensed septic installer or inspector with the local health dept. As a result, the procedures of the inspection lead to unfavorable results, create gray areas or areas of concern for the potential buyer and possibly the buyer's lender. These are just two examples of how a deal can quickly fall apart. These types of situations occur all of the time. The good news is there are steps to prevent deals from falling apart prior to negotiating a contract or even after negotiations have ended. The bad news is, the world of septic systems is not going to get any easier.

The Ohio Department of Health is hoping to enact new septic rules by May of this year. The Columbus Dispatch published a good article covering this topic on December 26, 2013. The article discusses the results of a 2012 statewide survey of local health departments. According to The Columbus Dispatch, the study revealed about    31% of septic systems across  Ohio  leak sewage into streams and groundwater; 4031 new systems were in stalled in 2012 with more than half being standard systems at an average cost of $7,446; in counties with stricter rules 1423 alternate systems were installed at  costs ranging $9,682-$12,125. As a listing agent, I would recommend that homeowners who are thinking about putting their home on the market this year  be proactive and have your septic system inspected before listing. This will allow you to disclose facts and know what to expect when moving forward.

If your system passes that's awesome and that is definitely a great selling point! If it fails, you will now be able to determine what you need to do next ( including possibly pulling a permit for a new system). This will prevent unwanted surprises later after  you have entered into a contract with a buyer. As a buyer's agent I would advise buyers who get a septic inspection to use an expert or the local health dept. If using a general home inspector,  hire someone who has a good understanding of how septic systems works and is educated about the normal amount of water that goes into a system on an average day. Most health departments and experts will recommend that a septic tank be cleaned and inspected every 2-5 years. Now, that's the kind of information I like to see on Ohio Residential Property Disclosures as a listing agent and as a buyers' agent! Don't let your deal go down the drain.

Debbie Powell, Sales Associate



1 Response to "Septic Issues Can Flush A Deal"

BenAffleck wrote: Agree with you But there are lots of way get out from septic tank and drainage problems
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Posted on Saturday, April 19th, 2014 at 8:42am.

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