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Old 09-02-2013, 01:51 PM
 
221 posts, read 943,534 times
Reputation: 373

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Here's my situation. If you want to throw in your 2 cents I'd be grateful!

I've been looking in a very RURAL area. There is not much on the market here, and also not many buyers out looking. Still, the home I've found is really my IDEAL home.

It is a 1940s house built very solidly and in good condition, with fairly new roof and furnace. However, in the process of working to prepare the house for market the current owners found that in order to comply with current county code, a new septic system is needed. They have offered to pay for this if the price of the septic becomes part of the final price - which I guess would be good for someone getting a mortgage.

However, I've decided to buy the house for cash. (This isn't the issue at hand, so please don't go after this tangent!)

So -

For a cash buyer,

Are there any advantages/disadvantages to letting the sellers pay for the new septic (including that price in my offer) and have the work done while they are still the homeowners?

Are there any advantages/disadvantages to buying for a lower price and paying for the septic myself, with the work done when I am the homeowner?

Or does it matter at all?

Oh - the owners have gotten an estimate of $6500 for this work.
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Old 09-02-2013, 01:54 PM
 
Location: Wonderland
38,466 posts, read 30,528,744 times
Reputation: 53467
Well, if you do it yourself, you get to pick who installs it, where they put it and run the lines, the exact system, etc. If the end price is the same, no matter how you slice it, I'd have it done myself.
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Old 09-02-2013, 01:56 PM
 
Location: North Beach, MD on the Chesapeake
30,742 posts, read 37,310,731 times
Reputation: 38199
Check the septic rules again. Most jurisdictions don't require a new system if the current one is working properly. If that were the case people would be getting new systems every 5 years or so due to technology/code changes.

To your original question, what works better for you? If indeed the the septic needs replaced can the property be transferred to you without the new system in place? If yes, how long can you wait before moving in?
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Old 09-02-2013, 02:24 PM
 
Location: Lexington, SC
4,281 posts, read 10,011,120 times
Reputation: 3695
Quote:
Originally Posted by North Beach Person View Post
Check the septic rules again. Most jurisdictions don't require a new system if the current one is working properly. If that were the case people would be getting new systems every 5 years or so due to technology/code changes.

To your original question, what works better for you? If indeed the the septic needs replaced can the property be transferred to you without the new system in place? If yes, how long can you wait before moving in?
Good advice.
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Old 09-02-2013, 02:37 PM
 
28,019 posts, read 65,948,673 times
Reputation: 17481
There is ZERO reason to have the current owners supervise the installation the septic system replacement.

Even is this was an FHA financed sale the smart thing to do would be to put funds in escrow.

If the buyer is using no financing there are a whole lot of ways to structure this -- depending on how local assessor might treat selling price it may make sense to solicit opinion of locally experienced real estate agents as to how to record this in sales documents -- credit to buyers to repairs allows the new buyer to supervise the work / handle hold-backs / get warranty done right.
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Old 09-02-2013, 03:45 PM
 
Location: SW Florida
8,797 posts, read 5,928,596 times
Reputation: 11931
Quote:
Originally Posted by Lily0fthevalley View Post
Here's my situation. If you want to throw in your 2 cents I'd be grateful!

I've been looking in a very RURAL area. There is not much on the market here, and also not many buyers out looking. Still, the home I've found is really my IDEAL home.

It is a 1940s house built very solidly and in good condition, with fairly new roof and furnace. However, in the process of working to prepare the house for market the current owners found that in order to comply with current county code, a new septic system is needed. They have offered to pay for this if the price of the septic becomes part of the final price - which I guess would be good for someone getting a mortgage.

However, I've decided to buy the house for cash. (This isn't the issue at hand, so please don't go after this tangent!)

So -

For a cash buyer,

Are there any advantages/disadvantages to letting the sellers pay for the new septic (including that price in my offer) and have the work done while they are still the homeowners?

Are there any advantages/disadvantages to buying for a lower price and paying for the septic myself, with the work done when I am the homeowner?

Or does it matter at all?

Oh - the owners have gotten an estimate of $6500 for this work.
I can't understand the need for a new septic system if the old one has passed inspection and is functioning well. If there were a problem with the system, ie, the drain field shot, or the tank collapsing, I could see where a new one was in order, and I'd assume (and might be wrong) that the buyer would pay to "fix" the septic system. So I'm wondering who wants that new system, if it's the buyer, I'd say he should pay for it if the old one is still ok. But it's all between the seller and buyer, so whatever they agree to would be what's done. If I were a seller with an old septic system that's functioning just fine, I wouldn't pay for a new one.

I didn't think that houses were required to meet current codes in order to be sold-as long as everything was in working order and not in need of repair, and there isn't ongoing construction there. But I've heard of some wierd stuff required by bank appraisers in order to raise an appraisal amount, so the buyer can obtain the mortgage, stuff that looked to me to be just because the appraisers can- some folks really get off on that little bit of illusory power they might have by seeing others jump through hoops they've created.... I knew a couple that recently sold their house, who had to update their electrical system from fuses to breakers, and update their wiring as well.This was required by the appraiser, not the county.

Of course, in this case with the buyer paying cash, there shouldn't be an appraiser with all those hoops for the buyer/seller tojump through.
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Old 09-02-2013, 04:05 PM
 
Location: Scottsdale, AZ
1,970 posts, read 3,659,590 times
Reputation: 2819
Quote:
Originally Posted by KathrynAragon View Post
Well, if you do it yourself, you get to pick who installs it, where they put it and run the lines, the exact system, etc. If the end price is the same, no matter how you slice it, I'd have it done myself.
I agree with this comment. If you pick the company, they will treat you like "thier" customer becuase you are paying them.
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Old 09-02-2013, 04:10 PM
 
221 posts, read 943,534 times
Reputation: 373
Oh, I should have clarified:

The "County Compliance Inspection Form" from the inspector (which I have a copy of) has a check by "imminent threat to public health and safety" (on the form) because "tank is too close to the well" (written).

It's been located there for over 60 years, but since it's now on file with the county as an "imminent threat" I guess it has to be done.

Plus, even though the well reports on file are all fine, I don't really want to be drinking e-coli at any point!

And, the Realtor (who is dual agent in this instance) says that the current owners have offered to pay the cost of septic for those who need that amount as part of their mortgage.

So does that mean if I pay for the septic myself I should deduct the cost of the septic from the asking price? Or, as someone suggested, ask for a "septic" escrow??
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Old 09-02-2013, 04:20 PM
 
Location: Wonderland
38,466 posts, read 30,528,744 times
Reputation: 53467
The easiest thing would be just to deduct the price of the new system from the sales price and pay for it yourself. I can't see any disadvantage to doing this.
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Old 09-02-2013, 04:33 PM
 
Location: North Beach, MD on the Chesapeake
30,742 posts, read 37,310,731 times
Reputation: 38199
Quote:
Originally Posted by Lily0fthevalley View Post
Oh, I should have clarified:

The "County Compliance Inspection Form" from the inspector (which I have a copy of) has a check by "imminent threat to public health and safety" (on the form) because "tank is too close to the well" (written).

It's been located there for over 60 years, but since it's now on file with the county as an "imminent threat" I guess it has to be done.

Plus, even though the well reports on file are all fine, I don't really want to be drinking e-coli at any point!

And, the Realtor (who is dual agent in this instance) says that the current owners have offered to pay the cost of septic for those who need that amount as part of their mortgage.

So does that mean if I pay for the septic myself I should deduct the cost of the septic from the asking price? Or, as someone suggested, ask for a "septic" escrow??

Did the inspector (and which inspector, a Health Department officer or the real estate inspector) fail the septic or just note it? The laws, of course, will vary but here the proximity is not an automatic failure, especially if the well tests clean. By the way, did the well test clean? I see you said it did but how recently?

I should have looked where you are but many areas have a "septic season" when perc tests are done. If yours does, and you missed that window, you may have to wait until next year to have a test done and a new septic installed.

You really need to find out exactly what is meant by "imminent".
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