25% of homes in the United States used septic tanks in 2020. This is according to Sara Heger, a researcher at the University of Minnesota’s Onsite Sewage Treatment Program.
This translates to more than 32 million homes in America. The number has certainly gone up by now, thanks to the fact that people are moving away from cities to rural areas.
Septic systems make waste disposal convenient for areas where municipal sewerage systems cannot reach.
When buying or selling a house, the whole topic of septic inspection always comes up.
Each party wonders who will take care of this cost.
A septic tank is an important feature of a home. A faulty or non-functional septic is a nightmare for a buyer.
We have a succinct guide that explains who pays for septic tank inspection.
Who Organizes Septic Inspection?
Buyers are typically the ones that arrange for septic inspections, for the most part.
It is in your best interest (as a buyer) to purchase a home with a functional septic system.
Having a faulty system will negatively impact your experience as a homeowner.
For example, the location of an underground septic tank determines if you can carry out renovations in your home or not.
You cannot even park your car under a septic tank. Additionally, you want to know if you’ll be dealing with clogs and tree roots growing into the pipe system.
A buyer is also responsible for requesting a home inspection to get loan facilities.
Lenders have specific guidelines when it comes to home buying. They often request thorough home inspections from prospective buyers before giving loans. They do this to avoid expensive repairs that might come up later.
Regardless of the visual condition of the septic system, lenders will still require inspection certificates.
The inspections cover things like pipe integrity, drainage, and proper ventilation.
As such, buyers arrange for inspections in the hopes of getting funding.
Who Pays For The Septic Inspection?
From the information above, you can already tell that a buyer is the one responsible for taking care of a septic inspection.
Identifying issues and fixing them will save the buyer thousands of dollars down the drain.
No one wants to move into a new home only to discover that the septic system doesn’t work as it should.
Perhaps the drainage is a mess, the pipes are broken, and the tank has never been pumped within the last five years.
After the transaction is over and the seller is out of the picture, the buyer will be left dealing with the mess.
Why go through all that when you can get the home inspected before money changes hands?
Secondly, buyers shoulder the cost to get lenders to approve their mortgages.
A home with a failing septic system has a zero chance of being financed.
In an economy where people depend on mortgages to buy homes, prospective homeowners must do all they can to appease their lenders.
To add to that, buyers pay for septic system inspections because it is a requirement by law.
Most states consider septic tank inspection as a buyer’s due diligence. As such, real estate transaction regulations state that buyers are in charge of septic tank inspections—financially speaking. These include Texas, Washington, and South Carolina.
While most states place the financial burden of septic tank installations on buyers, others work differently when it comes to septic tank inspections.
One example is Virginia where the seller is required by law to foot the inspection bill.
The standard purchasing agreement states that a seller should have their system inspected within 30 days of closing the deal.
All sellers must abide by this rule if they want to sell their homes to the best buyers in the market.
In other states, the seller is allowed to carry out the inspection once the contract has been accepted.
This is done to avoid situations where one seller pays for several inspections.
It saves them from incurring costs and having prospective buyers back out of the deal.
Before doing an inspection, find out from your local real estate agent about who takes care of the cost.
If you are a seller and the state puts the burden on you, don’t carry out the inspection before the contract has been accepted.
If you do, you might be needed to repeat the process again to meet the timeline of the contract.
The Buyer-Seller Agreement Also Matters
The responsibility of catering for a septic tank inspection can also be determined by the buyer-seller agreement.
Sometimes, both parties reach an understanding without the help of local or national real estate rules and regulations.
They can decide that the buyer will pay for finding the location of the tank and having it pumped out.
The seller, on the other hand, can take care of other costs such as getting access to the tank and assessing the whole system.
If the parties reach an agreement and put it in writing, the law will not interfere.
Who Takes Care Of Repairs?
During a septic tank inspection, issues are bound to arise.
Septic systems aren’t designed to last forever.
Even with the best maintenance, they malfunction from time to time.
During septic tank inspections, repairs and replacements often surface. This is especially true for systems that don’t undergo yearly inspections.
It is only fair that the seller takes care of the repairs. After all, they are the ones disposing of the property. The receiving party should get it in its best state.
With that said, the cost of repairs is sometimes split between the buyer and the seller.
The contract terms dictate how to proceed in such a situation. Sellers can carry out all the repairs by themselves or split the costs with the buyer.
In the latter circumstance, the seller gives the buyer a closing credit equivalent to the repair amount.
The seller can also decide to not pay for any repair if the contract doesn’t have any agreement about it.
In this case, they will walk away from the transaction altogether.
Before the contract is signed, the seller is at liberty to drop out of the deal.
Wrap Up
When buying or selling a home, a septic system inspection is necessary.
It ensures that the buyer buys a home with a functional wastewater system.
In most states, the buyer pays for the inspection. However, other states place this burden on the seller.
If you fall in the first category, the buyer pays for the inspection while the seller takes care of the repairs.
The agreement between the buyer and seller also determines what takes place during real estate transactions.
So, yes the location and seller agreement determine who pays for septic tank inspections during real estate transactions.
Also read: Seller Didn’t Disclose Septic Tank Issues: What Should I Do?