Septic Blues

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Did I mention, I put a house into escrow yesterday? Yep, sure did – nice little place down in La Selva Beach. Needs work, being sold “as-is.” Of course, the California Association of Realtors Purchase Agreement is an “as-is” contract anyway, so there’s no reason for sellers to get all huffy about selling “as-is.” Really, it’s purely a marketing and negotiating tactic. I mean, what seller is going to say, “Yeah, hit me up for every nickel-and-dime defect you can find in the place, I’m happy to give you credits!”? Exactly.

So anyway, it looked like we were going to be getting the home for a decent price. Buying any home these days is something of a gamble, what with the uncertainty of the market and all. To induce the sellers to accept a lower price than they were asking for, we offered them a quick release of our physical and financial contingencies. That meant we had to get our inspections done chop-chop, as well as the appraisal. Being the good Realtor that I am, I ordered everything up on Monday. First, Septic, then Home Inspection – and somewhere in there, the appraiser would come out and do his thing.

So today, the good folks at Art Edsberg Drilling and Sanitation (hi, Jasper!) came out. They’d serviced the system a few years back, in 2000 – so they knew right where to find it. The started working right away. About an hour into the process, the bad news came down: the tank was toast. They had told me when I ordered the inspection that it was a concrete tank – hooray, I thought! Often times in an older home, the tank will be redwood, and then for sure, it’ll have to be condemned. However, this tank appeared to be the original poured-in-place tank from when the house was built i n the 1950’s. It was leaking right out of the bottom.

Now, here’s where it gets tricky. The leach field did pass the 30 minute flow test. However, according to the septic company’s records, the system had had problems in the past. Their feeling was that the leach field should be replaced, too – with a pit system. They’re going to work on getting me a bid for repairs – should be around $20,000 to $25,000. The good news here is that they only charged the buyer $525 for the work they did – $75 off the $600 estimate!

Now, the sellers had made no disclosures about there being a problem with the septic system. They had done a termite report, but not a septic report. In fact, I had asked the listing agent about the septic system, what information did he have on it. He said something to the effect that he knew the tank lid had been replaced a few years back. Hmm. Not much of a disclosure, and it kind of lead me to believe that there was nothing too wrong with the septic system.

So now we have a challenge. My buyers, of course, are not going to want to fork over $25K for septic work. We are going to hit the sellers up for this money, naturally. However, we just negotiated a low price, so they may feel they’ve already done as low as they can go. The good news is that we have the report on our side: if they don’t kick down for a new septic system, they will have to pass this information along to the next buyer. Also, the home was in escrow twice before, but fell out “due to no fault of the property.” That’s as may be, but how is it going to look to buyers and their Realtors when they see that it has ping-ponged in and out of escrow three times? It looks bad – and then when they find out the septic system is toast, what might other potential buyers think? Exactly, again. Better to pay for a new septic system and keep my clients as buyers.

But I haven’t seen the report yet – I should get that tomorrow. I’ll let you know how it goes. 🙂

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