What are the risks of buying a house with an underground oil tank?
Many homes in Bergen County may have had an underground oil tank at one time or another and they are still in use today many having been in the ground since the 1900’s. During that time many tanks have corroded and some have had oil leaks into the soil or into the water table.
Remediation for this is costly and can become a major headache for any homeowner since there is no cost regulation for clean-up if there is an oil leak. If you are thinking of putting your house on the market, many buyers do not even want to look at a house that has an oil tank underground because of fears of the unknown and inexperience even if the tank does not have a leak.
In many cases even if the oil tank is tested and shows no leaks many sellers end up selling their homes for a reduced profit than if they would have taken measures to address their UG oil tank before putting it up for sale.
I strongly suggest that current homeowners that have an underground oil tank sign up for comprehensive oil tank insurance to give themselves immediate protection. This is a separate insurance then homeowner’s insurance. You must also read the fine print because each one covers a certain dollar amount of damage. Several tank insurance policies are transferable to the new buyer, just make the phone call and get it in writing before you complete the inspection period of buying a home.
If you want to eventually remove the tank after having the insurance in place for several months, most tank insurance companies will require the replacement to be an above ground oil tank for one year. This is o.k. because at least you are moving in the right direction to get the process going. Once the year has passed you can convert to gas heat should you choose to do so or you can continue to use oil heat without the same concerns. Make sure all piping leading to old underground oil tank is removed.
How do I change over to gas if there is an above oil ground tank & is this risky?
An oil tank removal company drains out the remaining oil from the tank, then they break the tank apart if it is indoors and remove all the debris and piping to the outside. You then hire a plumber or heating company and purchase a new gas boiler. The process is not difficult.
A buyer who is purchasing a home with an above ground oil tank need not worry but should still do what is called a “tank sweep” on the property during their inspection to make sure there is no evidence of any underground oil tanks on the property. This should be done even if the house you are buying has gas heat. It usually costs about $150-200.00 and is worth the expense to gain important peace of mind for the purchase of your important investment.
What Repairs should a seller do before putting their house on the market?
It is not a bad idea to get in a local inspector or contractor that you may know to do your own inspection of your home including getting a licensed pest & termite inspector to go over your home to make sure your home is sound or if it is in need of repair. Make sure you keep a receipt of the repairs that you completed for your records. Hold on to any warranties that are transferrable to a future buyer. All of this may add value to your enjoyment and future sale of your home.
Another smart idea is to fix something right away when it breaks or updating your home periodically. When you keep putting it off the problems become worse and more expensive to repair. There sure are a lot of us that are guilty of putting those things off and procrastinating!!
Too often sellers think their home is in perfect condition. Then a buyer comes along with their inspector and things come up you either were unaware of, or didn’t think was a problem.
Since many inspectors come in your home and spend 3-5 hours, they are bound to find something during that time, so be prepared and be pro-active. This will minimize a request that a buyer or his attorney may impose on you usually by requesting a credit. It will also make the process of selling your home easier for all those involved.
By the way, for those of you who are just not in a financial position to do those repairs prior to selling your home, just make sure your home is priced in consideration of the condition of the home. In addition, expect that other credits may be requested but, it should be within reason. Ask the advice of an experienced Realtor and attorney to try and negotiate a reasonable credit during the inspection period of the home buying process.
By Nicole Idler