potential problem: 4 bedroom house has septic permit for 3 bedroom (Durham: real estate, loan)

[newgirlRaleigh]

I am unsure who to ask for help regarding this, so maybe someone out there can offer me some direction.

We are two weeks away from closing on a house that is 10 years old. We had the septic system inspected Friday and in the process discovered that the septic permit is for a 3 bedroom house instead of 4 (the house is being advertised as 4, and does indeed have 4--although it could be five if you count the bonus room, which has a closet).

What I want to know is what are any potential problems as a result of this? Will there be problems for resale (will we be forced to advertise it, and therefore price it, as a 3 bedroom?) or before the bank lets us have money to purchase it, will they (the bank) expect the owners to order a more recent perk test? Will the house appraise (by the bank/for our loan) lower if the septic system is illegal for that size house?

I just don't know if this is a big deal, and if so, how big.

Our agent is not very concerned.

Thanks so much.

[frankpc]

I'm more familiar with Durham County than Wake but I'm pretty sure that the septic permit determines the legal number of bedrooms the home is allowed.
You could probably call the County Health department for confirmation.
The septic permit bedroom quantity is driven by the amount of "perkable" soil. With a reserve field also required.

Frank

[zthatzmanz28]

Seems my niece (a realtor) had a similiar problem. If I recall, the sellers had to concede there were less bedrooms and the buyer had to accept that or the buyers could have walked. She was the buyer's agent I believe. There may be other solutions the experts here will have? The problem is are the buyers paying more for the listed bedroom than they would have offered if the bedroom was not mentioned? And when the buyer goes to resell the house later will it bring less on the market?

[newgirlRaleigh]

Thank you, Frank. I called them and they gave me the number to the permitting office. The guy that wrote the permit says they need to add a drain line if the owners are selling it as a 4 bedroom, or it can be sold as a three bedroom with office, or add a drainage line if there’s room!

Is a three bedroom with office the same value as a four bedroom house? For us, the use will be the same, but if we ever needed to sell, will be lose money (we're buying it as a 4 bedroom and will have to sell it as a three bedroom)?

This is giving me a headache

zthatzmanz28, the permitting office said the owner has also contacted them, so that's good that they are on it. Like you, my first thought was what about the value.

[frankpc]

Glad the County could help.

Seems like a couple of options:

1.) Have the current owners do the work (or escrow money) to get a four bedroom septic permit.
2.) Decided how much the house is worth as a three bedroom.


I'll defer to our local real estate experts - but if the contract notes four bedrooms and the septic permit is for three - it seems like someone should catch that before closing? Or is that typically not looked for?

Frank

[newgirlRaleigh]

Originally Posted by frankpc

Glad the County could help.

Seems like a couple of options:

1.) Have the current owners do the work (or escrow money) to get a four bedroom septic permit.
2.) Decided how much the house is worth as a three bedroom.


I'll defer to our local real estate experts - but if the contract notes four bedrooms and the septic permit is for three - it seems like someone should catch that before closing? Or is that typically not looked for?

Frank

Hi, Frank.

I'm not sure how this was missed when the current owners bought the house 3-4 years ago. (They are the second owners.) You'd think something like that would be looked for, but apparently not. If the septic system is amended to accommodate 4 bedroom, it will probably mean cutting down trees. Ugh.

I'm not sure what a reliable source would be for finding out the difference in property value for a 4 bedroom vs 3 bedroom with office.

[freshjiv]

You definitely want to be able to advertise your house as a 4 bedroom home, so get the current sellers to do whatever they have to do to allow you to do so, otherwise, I would offer about 25K less since you are going to be losing a bedroom from the specs.

[North_Raleigh_Guy]

It's not just the difference in price, it is also the difference in the size of the pool of future interested buyers. People in the market for a 4 bedroom home aren't going to consider this a viable home unless the septic is approved for 4 bedrooms.

It sounds like the current owners didn't do their homework when purchasing 10 years ago. That doesn't mean you need to deal with the fall-out. I would either get them to upgrade the septic so it can be properly permitted for a 4 bedroom home or accept the fact that you are buying a three bedroom home with two extra rooms and will have to be advertised as such when you sell down the road. Your RE should be able to advise you on any difference in price to be negotiated.

[nervous_in_new_england]

The headache you have now is nothing compared with the headache you will have when you go to sell the house, if you don't remedy this problem. It's a hassle and a disappointment, but either pay for a 3 bedroom, knowing that's how you will sell it or have the owners do all the permitting, drain line additions, etc. on their own dime before you close.

You might want to have a contractor of your own choosing estimate the job and make sure the contractor you trust has an estimate of roughly equal value to the estimate of their contractor. Make sure you understand all that needs to be done, and make sure it gets done.

[zinner]

So the septic system is too small for the house that it's permitted for ? Aside from the permit issues sounds like it was sized right to start from.