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THINGS YOU SHOULD KNOW BEFORE BUYING REAL ESTATE
ABANDONED IN GROUND OIL TANK
Make sure that there is not
an
abandoned oil tank in the ground, particularly if you're buying an older house. An abandoned oil tank that still has oil in it will someday leak causing an
environmental problem. The average cost of an oil tank contamination cleanup in New Jersey is twenty five thousand and up. The only way that one can be sure
that there is not an abandoned tank is to have a tank search made with a special metal detector. The cost of the search is about two hundred to two hundred and
fifty dollars. However, before you pay for the cost of a search, there are a few things you can do to investigate the matter at no cost.
1. Ask the
seller to provide certification that there is no in ground oil tank and have the seller pay for it.
2. If there was a tank and it was decommissioned
properly and the seller can provide the proper documentation, there is no problem.
3. Ask the home inspector, as a courtesy, to look for signs of an
abandoned tank while conducting the home inspection. Some obvious signs would be:
(a) filler or vent lines sticking out of the ground
(b) copper oil
feed lines coming through the wall of the basement
(c) an abandoned feed line where the old furnace was located.
If any of these signs are
noted, insist on a tank search and removal, and proper certification that the property is environmentally acceptable.
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IN-GROUND WORKING TANK - If the heating system has an in-
ground working tank, have it checked for leaks. One of the big mistakes people make with an in-ground working tank is to not have it checked. Often,
the owner has tank insurance and the insurance can be passed to the next owner. That all sounds great but does the insurance cover ground
contamination? Many or should I say most oil tank insurance policies only cover the cost of the tank replacement and not ground contamination. If
you're getting a insurance policy for the tank, have your attorney check the policy for both removal and contamination clean up.
PERMITS - When buying a house, a permit search should be conducted, particularly if the house has been remodeled or updated.
The following are areas that would require permits in most municipalities: a new addition, a new bathroom, a new or remodeled kitchen, a finished attic
or basement, a new heating system, a new central air system, an update of the plumbing or electrical system, or any other type of repair or update. To
purchase a house where major work has been done without permits could cause the buyer some serious problems later when selling or remodeling.
To
protect the buyer, G Warren Inc Home Inspections, when inspecting older houses, very often will suggest that a permit search be conducted, even though
permit searches or requirements is outside the scope of a home inspection. The following are two quick stories about permit problems as related to
construction and a plumbing update, both installed without permits.
FINISHED ATTIC PROBLEM - Edison, New
Jersey: A woman bought an older colonial that was in really good condition, the previous owner was an excellent carpenter that kept the house well
maintained. About a year after she moved in, she decided to finish the attic area and applied for a permit. When the township inspector came to the
house to inspect for the permit he gave her some shocking news. The two window dormers in the attic were illegal construction; no permits were obtained
for their construction. The inspector informed her that the construction of the dormer did not meet code and would have to be re-framed. Needless to
say, the seller was nowhere to be found and the re-framing of the dormer to meet code was a substantial added expense
PLUMBING PROBLEM - Dunellen,
New Jersey: A retired lady decided to sell her house and move to another state where she had children living. The realtor found a good buyer and
everything was going along smoothly until the township inspector arrived for the certificate of occupancy inspection. The inspector found all new
plumbing had been installed without a permit. To obtain a C of O the woman would have to take out a plumbing permit and have a licensed plumber certify
the plumbing. It seems that the plumbing nightmare began when her brother , a licensed plumber, did the complete job without a permit and passed away
without ever getting the permit. The woman did get a plumber to certify someone else's work; a task which was very expensive and not easy. Needless to
say, the hold up for the C of O affected the mortgage rate, the commitment, the attorney's closing date, and the movers moving date.
VACANT HOUSE PURCHASE - The following are some special cautions to take when buying a vacant dwelling:
1. Ensure that
all the utilities are turned on and functional. Make sure the water, electric and the heating system are functional before ordering a home inspection.
If any one of these systems is not functional at the time of inspection, the house should not be inspected. To purchase a home without a through
inspection of any one of the utilities could lead to some very expensive repairs. For example, if the water is not turned on, none of the plumbing, the
bathrooms, the hot water heater, the dishwasher, the kitchen sink and possibly the complete heating system can not be inspected. The home inspector is
only responsible for what can be inspected the day of inspection. If he has to return to inspect something that was not available for inspection at the
time of inspection, there is an extra charge.
2. Many times vacant houses have been vacant for a long time and are sold at what appears to be a
great price. However, vacant houses sometimes develop some hidden problems that eliminate the savings. Some hidden problems may be:
a. Broken or
leaking pipes in the wall that are not visible
b. Sheet rock or plaster damage to the walls or ceilings caused by improper heating. (If the house
was not being heated and the house interior temperature dropped to the freezing point, the result can be some serious damage.)
c. Animals, such as
squirrels, birds, or raccoons, have moved into the attic.
To be sure that the bargain price on a vacant house is really a bargain, we have two
recommendations: First, get a good home inspection, and second, get exact repair cost of any repairs that the inspector recommends. In other words,
don't guess at repairs for which there could be hidden costs.
3. A house that has been vacant for a long time (over a year) one should really try
to find out why it remained vacant for so long. One should investigate the following:
a. Was the house over priced? Houses that are priced right
usually sell.
b. Is it an estate sale? Most times the house can't be sold till the estate is settled.
c. Is there a structural problem?
d.
Is there an environmental problem? A vacant house with a water leak is a prime candidate for mold.
e. Has there been an environmental clean up from
a leaking in ground oil tank?
f. Is there a termite damage problem?
TERMITE INSPECTION - Never,
never, never, buy a house in New Jersey without having a good thorough termite inspection. Eight out of ten houses we inspect have some type of termite
damage. However, most of the time the damage we find is minor and can be fixed for a few hundred dollars. The houses with the serious damage are
usually houses that have water penetration problems and have not been properly maintained. The following is some good information about termites and
the termite inspection:
1. Don't panic and lose a good house because it has termites. As mentioned earlier, usually the termite damage can be
repaired and with the modern termite treatment termites are easy to eliminate.
2. Check with your mortgage company and find out if you need a clear
termite certification to obtain a mortgage particularly if you are buying a condo. Most condo associations will repair any termite damage, but will not
give a clear termite certification required by the mortgage company. The catch 22 is that you may find yourself in a situation where you're buying a
condo located on the second floor where you know there are no termites, yet the mortgage company wants a clear termite certification. If you find
yourself in this position, hire a termite inspector and get the clear termite certificate.
3. Always have a house inspected for termites and always
hire your own termite inspector. The seller may have a termite treatment contract and insurance policy but that doesn't mean there is no damage. It is
not uncommon for a dwelling to have termite damage that has not been repaired even though there is a treatment contract and insurance policy. We also
suggest that you, the buyer, read the disclosure statement to see if any termite repair work was done, and, if so, how extensive was the repair.
RADON - First of all, I recommend that you don't terminate the purchase of a good house over a high radon
reading. Simply defined, radon gas is a natural form of radioactive gas, which is developed by the decay of granite rock and certain soils. As per the
EPA, if the radon level in the home is equal to or greater than 4 pCi/L (picocuries per liter) it is dangerous to your health. The radon test is
conducted in the lowest living level of the house and the basement is considered a living level. Years ago, when radon was first discovered, the
installation of a radon venting system was very expensive, and a house with high radon was hard to sell. Today the cost of a radon venting system is
very reasonable and appears to have little or no effect on the resale value of a house. In other words, don't let a high radon level stop you from
buying a house, but you would certainly want the seller to pay for the venting system. The exact price of a radon venting system, (mitigation system)
varies according to the size of the house and whether or not the house has a sump pump or French drain. However, to give the reader an idea of price,
the average cost is between fifteen hundred ($1500) and two thousand ($2000) dollars. All this can be summarized by saying that once a proper venting
system is installed in a house with high level of radon, that's the end of the radon problem.
SELLER'S DISCLOSURE
STATEMENT - Most realtor today require a disclosure statement from the seller. The purpose of the disclosure statement is to have the
seller disclose any problems that are not readily observable, or any serious problems that have been repaired. A smart buyer will obtain a copy of the
disclosure statement and study it in detail before spending one cent for inspections. There may have been repairs or a present condition that you, the
buyer, may not want to deal with after the purchase. Everything is fixable, but for some buyers any type of repair is too much fixing. The standard New
Jersey realtor disclosure statement is very detailed and informative. Click on the following web site for an example of the New Jersey realtor
association disclosure statement.
http://www.betterhomesnj.com/pdf/SELLERS_PROPERTY_CONDITION_DISCLOSURE_STATEMENT.pdf
EIFS
SIDING - If the house you are buying has EIFS (Exterior Insulation Finish Systems) siding, it must be inspected by a EIFS specialist and the
inspection is expensive. This type of siding has a history of water penetration which results in wood rot and mold problems. When water penetrates this
type of siding, the foam insulation behind the siding act like a sponge that traps and retains water and moisture which causes wood rot and mold
problems. EIFS siding has such a poor reputation for causing serious wood rot and mold damage, that it is not unheard of for a seller to remove the
EIFS siding and replace it with a standard type siding to sell the house. One more word of caution, do not accept a price reduction to replace the EIFS
siding without knowing the exact condition of the structure behind the siding. The last thing you need as the new owner is to find out that the repair
cost of any wood rot and or mold damage is ten times the price allowance. To find out more about EIFS siding, click the Christian Building Inspectors
of Georgia site address below. They have a great site for EIFS information.
http://www.christianbuildinginspectors.com/index8c.htm
SEPTIC SYSTEM - Although a leaking roof is probably the most common repair, one of the most expensive items to replace is a septic system. I
don't know about the rest of the country, but in New Jersey a septic system costs, on the average, from forty to sixty thousand dollars. For that
reason, it's imperative that you hire a professional licensed septic system inspector. This should be the case especially if the house is an older home
with the original septic system. A through septic system inspection will involve tanking the tank top off, inspecting the tank, and flooding the fields
with two to three hundred gallons of water to test the absorption rate of the field. The following are some question to ask before you finalize the
contract to purchase:
1. Where is the septic system located? It may be located right where you want to install a swimming pool or another
structure.
2. How old is the tank and field. A field that is over twenty years old might have been abused. You could need a replacement. To quote
Ted Louden's article from the Michigan State University Agricultural Engineering newspaper.
"Studies that just look at averages without regard
to quality of construction or how the system is utilized show that the average life of a septic system is 20 years or more. This is the time period
until the system becomes sufficiently clogged with organic material that it either results in effluent coming to the soil surface or backing up in the
plumbing and reducing the efficiency of flow from the home. Well constructed, well maintained systems will last longer."
http://www.egr.msu.edu/age/aenewsletter/1_may_june_02/loudon.htm
Also a tank that has been just pumped out could be another sign of trying to extend the life of the system.
3. Have there been any problems
with the toilets backing up? If so, what was the problem? Toilet back-up is one of the first signs of a septic system problem. I am not saying because
a toilet gets blocked or backs up there is a septic problem, but it could be a sign of trouble with the system.
4. One last tip on inspections, I
don't recommend that you do all your inspections on the same day all at once. Do the inspections one at a time. A full home and termite inspection may
also call for a pool inspection, septic inspection, in-ground tank inspection, and others. If one of the inspections reveals a serious problem and you
decide not to go ahead with the purchase, you have not yet paid for the additional inspections.
For some excellent information on septic systems,
click the public educational site below.
http://www.soil.ncsu.edu/publications/Soilfacts/AG-439-22/
WELL WATER - Well water testing in New
Jersey is regulated by the Environmental Protection Agency (EPA). In September, 2002, the Private Well Testing Act was instituted. To quote a small
important section of the act, "Every contract of sale of real property the potable water supply for which there is a private well located on the
property shall include a provision requiring, as a condition of sale, the testing of the water." In other words, every time a house with a well is
sold, the well must be tested by a licensed EPA approved testing laboratory and the well must be tested for all the parameters outlined by the EPA.
Normally the seller of the property pays for the well testing and provides the necessary documents for the sale of the property. I personally think
this is a very good law that has saved many a family from health problems from a contaminated well.
For more detailed information or the
requirements to comply with to private well testing act, click on the EPA address below.
http://www.state.nj.us/dep/newsrel/releases/02_0081.htm
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Counties Served in New Jersey |
Middlesex County,
Union County,
Somerset County,
Essex County,
Hunterdon County,
Hudson County,
Bergen County,
Passaic County,
Mercer County,
Ocean County,
Monmouth County, and
Morris County.
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