House: Take Two

posted by mihow on March 21st, 2008

It appears there could be a potentially HUGE problem regarding the underground oil tank that will keep us from actually buying the house. I plan on discussing this further today but I have to feed the baby first. Heh. So, we may not be homeowners yet. We may back out of this entirely.

Tell me, why? Why did people think it was a good idea to bury oil tanks? I got so worked up last night and then I spent an hour thinking about all the environmental faux pas we’re currently committing that our kids and our kids’ kids are going to have to deal with once we’re dead and gone.

More later. And happy Good Friday.

Later…

We were told by our real estate agent that the whole oil tank fiasco is the leading cause of contracts falling through. During attorney review, the buyers request that the sellers have the oil tanks removed at seller’s expense and the sellers refuse. The deal ends swiftly. We’re looking at this house as a place to raise a family, sure, but we also don’t want to find that our ground is contaminated and we’re potentially in the hole (no pun intended) hundreds of thousands of dollars. I realize that’s a worst case scenario, but when planning for one’s future, one can never be too careful.

Here’s the bigger stinker: this particular oil tank isn’t just underground, it’s beneath the basement as well. Digging said tank up, or testing the soil, could prove to be one gigantic pain the ass for whoever decides to take on said feat. Not only do you have to pay to dig up the tank (which isn’t all that pricey alone) but you have to dig a giant hole in the basement, test the soil, wash the soil out (if there is any contamination) and then put the basement back together again. Scary, is the first and only word that comes to mind.

I wrote this before we entered attorney review and learned more about what lies beneath:

“We have a screened in porch that runs the entire length of the house. I am looking forward to turning it into a sanctuary for the entire family. (I envision plants, bird feeders, creaky rocking chairs, candles, and maybe a designated spot to practice yoga.) I can’t wait to listen to the chorus of crickets from that porch, let my cats curl up into fat furry balls at my feet on that porch, grow more wrinkles on that porch. I can’t wait to sit outside on hot summer nights, sipping a glass of chardonnay to wash down my Grand Old Man with my grand old man.”

I took the rose colored glasses of yesterday and am now willing to accept (as egirl put it) having to kiss a few more frogs first.

22 Responses to “House: Take Two”

  1. YourCuzGreg Says:
    March 21st, 2008 at 08:29 AM

    Don’t get too worked up about it. Same thing happened to a friend of mine when he was buying a house. As long as the people you are buying it from are going to pay for the remediation you’re fine. My friend had to hold off closing on the house until the work was completed (1 month or so) but everything went just fine.

    Oh, and two years ago my neighbors underground tank leaked and they had to have it corrected.

    See ya Sunday.

  2. mihow Says:
    March 21st, 2008 at 08:32 AM

    Yeah, thing is, I don’t think they are willing to do the work AT ALL. We were told they would back out most likely. Oh well!

  3. egirl Says:
    March 21st, 2008 at 08:52 AM

    Out of sight, out of mind? That’s the only rationalization I can come up with for burying oil tanks.

    They may be testing to see if you all will pick up the cost. However, in this market many people just need to get rid of their house. If you have any inside info that this is the case you might have some wiggle room in negotiatons.

    Here’s to hoping that this resolves…. but if it doesn’t then this house wasn’t the one for you anyway. You’ve got to kiss a lot of frogs….

  4. mihow Says:
    March 21st, 2008 at 08:58 AM

    Well put, egirl.

    We have read over and over again that we simply MUST demand that the seller digs up the tank, it’s in our best interest to do so. He will most likely NOT pay for testing because the tank was apparently certified and sealed, but that doesn’t mean that the ground has been cleared. We may still be looking at a problem for ourselves down the road. Worst case scenarios run people 200 – 300 thousand bucks.

  5. Brian Says:
    March 21st, 2008 at 10:46 AM

    Do not accept any liability for the seller’s problem. Make them deal with the tank situation until you and your lawyer are satisfied. If the seller won’t budge, run away as fast as you can. There are lots of houses on the market. You’ll have enough things to fix once you buy a house; you don’t need the oil tank anxiety.

  6. mihow Says:
    March 21st, 2008 at 10:54 AM

    Yeah, we aren’t going to deal with that, no way, no how. I just hope the seller will take care of it. If not, I do hope that some poor sod doesn’t fall for it and buy the house. But it won’t be my problem then, I suppose.

    We heard that they can test fairly simply by drilling into the basement. Thing is, I bet the seller won’t agree to pay for that either. Look at it this way, say he does make the test and discovers that the ground is in fact contaminated, well, then we back out and he has to deal with it in order to sell it to someone else. Guess I”m saying, ignorance is bliss. He can still hope that someone agrees to buy the property as is. We aren’t those people, however.

  7. lr Says:
    March 21st, 2008 at 11:36 AM

    It’s a buyer’s market. Let this house go. I can’t believe your real estate agent didn’t tell you this. Mine told me to not even consider a house with an underground tank. They are a huge trouble, and you might have trouble selling the house later. There are so many houses on the market and as someone else said you’ll have other things to worry about once you buy a house. This tank is a huge expense that you don’t want to take on not to mention a potential hazard to your health. Also watch out for radon gas and asbestos. Good luck in your search.

  8. corie Says:
    March 21st, 2008 at 12:46 PM

    It always amazes me that sellers don’t disclose this type of information right off the bat. Sure, it’s wishful thinking on the seller’s part that the buyer will just say, “whatever, I’ll take it anyway,” but in the long run, it just wastes everybody’s time and money (i.e. lawyers, lien searches, etc).

  9. lr Says:
    March 21st, 2008 at 01:43 PM

    Sellers are required by law to disclose this information. Always ask for a disclosure form when you go to look at the house. If they don’t have it ready tell them to email it to you, but they must give you this.

  10. mihow Says:
    March 21st, 2008 at 01:49 PM

    Hey, guys. I guess I didn’t make this clear. We did get a disclosure and knew about the tank. At the time, all we knew was that it had been filled and certified. But the more we’ve read, the more we’re insisting that the sellers dig it up before we proceed. If they do, the house is still ours. If not, we’ll look elsewhere.

    So, I think if this doesn’t work out, we’ll ONLY look at houses with natural gas and whose tank has been removed entirely.

    Live and learn. WE’re new at this, but not new enough to buy a potentially huge risk.

  11. Gillian Says:
    March 21st, 2008 at 02:01 PM

    Sigh. I remember the house on Revere Drive. It was built in the 40s, and had a brand new renovated kitchen. The door hardware was vintage. The floors were hardwoods, taken up from an old schoolhouse and laid down with love by the previous owners. The roof was new, the bathroom plumbing up to date, the siding less than a year old, but everything else was just old and beautiful and full of character. I sat on the back porch, watching the hummingbirds zip past my head, and dreamed of raising my children there.

    It fell through. Similar type reason to yours. There was no negotiating. I cried. The emotional attachment to a place that rings out HOME to you is a strong one.

    BUT. I found a place, eventually. I bought it. I got engaged on its back porch. I got married while living in it. And in a few weeks, I bring my baby home to it. Every once in a while I indulge myself in dreaming of an old lover, but I’m happy with the husband I ended up with. Sometimes . . . I get the same feeling about that old house.

    If this isn’t it – you may daydream of the life that could’ve been on that back porch, while sitting on the back porch of the house you do find. It’s out there somewhere.

  12. sally Says:
    March 21st, 2008 at 02:21 PM

    You could ask the seller to install four test borings around the location of the tank to just below the depth of the bottom of the tank and test for constituents found in heating oil. It’s expensive but it has been done.

  13. mihow Says:
    March 21st, 2008 at 02:24 PM

    Sally, do you know if it’s more expensive than digging it up? We just want zero liability and I really don’t think that’s going to happen.

    I am 99% sure we’re not going to take this house.

  14. sally Says:
    March 21st, 2008 at 02:44 PM

    Mihow, I’m going to send you an email. Its too complicated to put in the comments.

  15. sally Says:
    March 21st, 2008 at 03:38 PM

    Ok I can’t access my email, but I’ll try to be brief:

    If you install borings/take samples your cost depends on drilling equipment, number of samples, type of analysis, reporting, etc.

    If you dig it up, you are going to have to pay for (at the least) a) excavator b) permits c) tank and possibly soil disposal d) repairing the basement to original condition e) depending on where the tank is located in relation to the house you may need to have the foundation supported while the work is being conducted.

    It doesn’t sound like the seller is interested in negotiations and like others have said, given the market there may be something better.

  16. Jonathan Says:
    March 21st, 2008 at 04:23 PM

    I say don’t by the house.

    a- if it is dirty, and expensive to dig up / clean, you’re out that money b- if it is clean, and you decide to move one day, you’re going to have to deal with convincing a buyer to take the house without removing the oil tank too. you might be fine with a clean tank underground, other people might not.

    it just reeks of liabilities to you.

    also, why are you guys looking to buy now. aren’t prices supposed to get real real bad this summer/fall (bad for seller, good for buyer)

  17. ginar Says:
    March 21st, 2008 at 04:47 PM

    i saw a “Dirty Jobs’ episode where they dug up an oil tank in New Jersey… there should be a statewide program for this or something. Brownfields? EPA? let’s go, Jersey. (haha, right, this from a Detroiter surrounded by contaminants)

  18. rachel Says:
    March 21st, 2008 at 06:44 PM

    Hey Michele, I am actually really happy that NJ finally got on the stick with their regulations regarding oil tanks. Isnt this why the sellers have insurance? What if you paid for the test and they agree to deal with the removal if it is fubar? It would be something insurance would take care of. Can you fill the bitch with sand?

    Momma I am still seeing nice homes with natural gas on the market. If I do not have this kid like 5 minutes from now, lets plan on getting together this weekend if you are not celebrating the joy of the risen lord.

  19. Brad R Says:
    March 22nd, 2008 at 02:36 AM

    Hi Mihow. Sadly, I think your newfound grimness is the proper way to go about anything having to do with real estate. It is a road that is incredibly twisty, incredibly long, and incredibly bumpy. You can only see a short distance ahead even in the best conditions. Cautious optimism is the best you can allow yourself, with the emphasis on “cautious.”

    Sounds like you’re doing your due diligence. That’s really the best you can do. And I think you’re right to shy away from known liabilities. Those are the kinds of things that bankrupt people.

    I hate to say it, but never fall too much in love with a place before the closing. Never believe a deal is done till the check is in your hand. Get as much coverage in your contracts as you possibly can, and always have a backup plan. Grit your teeth. It’s not easy to do these things, and maybe none of them will really be necessary. But often enough they are. I’m to the point where I try not to think about it at all; and when I do, I halfway convince myself it’s going to fall apart. I even start visualizing what I’ll do when it does. I don’t know if that’s healthy, but given the vagaries of the RE biz (which includes no small dose of human-generated nuttiness), it surely seems rational.

    Good luck…

  20. Newlywifed Says:
    March 24th, 2008 at 10:07 AM

    I read all the time, but never post. I thought I would today, because I deal with this sort of stuff all the time.

    I’m an attorney, and have done alot of real estate closings in NJ with the same issue. The seller’s home owner’s insurance should take care of covering the costs of any potential contamination. Also, the seller should pay for the testing to be done as well, given the known hazard.

    Finally, I am sure you already know this because you seem to be totally on the ball in terms of research, but the process for remediating the underground oil tank is long and involved, and a huge pain in the ass…but if you love the house, it may be worth it to you.

    I kind of disagree with Brad R, buying your first home can be frustrating and upsetting, but you should try and have fun with it. What’s wrong with getting excited? If it doesn’t work out with a particular house, then you might be sad…but to approach it with such a negative outlook robs you of all the fun and magic of buying your first home. I prefer the “glass is half full” approach.

    PS:(No offense to Brad, I know plenty of people who think like he does, and it may be the way to go for some. It’s just a matter of what type of person you are…in the end, do what’s best for you!)

  21. CC Says:
    March 25th, 2008 at 06:34 AM

    Hi Mihow, sorry you had to take the rose colored glasses off! Your dream sounded amazing!

    But may I ask, why bury an oil tank in the first place? Was it for the electricity supply in the late 1800s?

    The good thing is that the documentation actually brought up the fact that there IS an oil tank under the basement to begin with. I fell into the trap of not fully inspecting a house before buying. The price is thousands of dollars worth of repair work!

    Anyway, good luck with the househunting, and I hope you find an abode that is just as lovely, with one less oil tank to worry about!

  22. greg Says:
    March 27th, 2008 at 12:20 PM

    not sure i followed…...is the oil tank in the ground still functioning, or is there also a new above ground tank that is being used for the furnace? granted the underground tank is odd but not a huge problem. if you’re running with well water then maybe it could be a problem, but with city water it shouldn’t be a problem.

    if the tank is abandoned, you can have it, cleaned out and filled with pea gravel to prevent the earth from crushing it….problem solved as far as i can tell. digging one up close to the house can cause disruption to footings and existing foundation wall which could telegraph cracks into the walls around the excavation. big expense and not worth it.

    just remember, “there are no problems in construction, only situations.” : )

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