WELL AND SEPTIC-A BIG DEAL FOR MORTGAGE LENDING

 

                                          pimov.com

Many folks dream of a home in the country-a few acres, a bit of land, space for a family to grow. Nothing wrong with that-I too once had a home in the country.  For the most part other than the mowing in the spring, fall and summer, the road to civilization being closed due to ice and snow in the winter, and the size and number of the mosquitoes, it was great. I had a huge vegetable garden, a bird feeder that attracted an amazing number of different types of birds, raccoons in my kid's wading pool, and other assorted wildlife that delighted us. Initially I was thrilled because there was no city water or sewage bill to pay. What could be better? The house was older-built in the 1940's. The sellers were the second family that had owned it, an elderly couple who didn't really have a recollection of where the septic tank was located other than it was "out back" the Mister said, waving his arm in the general location of the back forty.  It dawned on us after we owned the house for  awhile that perhaps "out back" wasn't an accurate enough description of where the septic might be.  If there even was a septic. Our worst fear was that perhaps our septic tank was a field tile that drained into the adjacent ravine.

  Wells and septic systems are the two items that create more litigation than any others with regard to real estate sales; and for good reason. Obviously human beings need clean water to drink unpolluted by ecoli bacteria, farm chemicals and lead. And we also must have clean, safe and efficient removal of sewage. It is when there is a malfunction or issue with either of these two vital systems that the trouble begins. Typically they are expensive systems to fix or replace.

  When a home is being purchased is the time to examine the well and septic.  I always highly recommend that the well be tested for contaminants. If the loan that a buyer is using is a government loan are specific requirements that the well water be sent to a laboratory for tests to be sure the water coming from the well is safe to drink.  VA only requires a bacteria test as long as that is what the county in which the property is located requires. USDA and FHA require a more extensive test that tests for nitrites, nitrates, and lead.  USDA will always require a well test.  FHA makes the test dependent on the appraiser's discretion.  Part of the issue is where the well is located with relation to the septic tank, septic field, house, and property line. HUD has set distance requirements to protect home owners from pollutants that could come from the septic or the house or nearby tilled fields that could potentially seep into the well water.  It is the appraiser's job to be the eyes of the lender and to determine if there are any issues with these distances. Which means that the appraiser has to be able to locate the septic system and its relationship to the well. Last I checked, most septic systems are buried, so unless the house is newer and/or the county requires permits sometimes it is hard to know where the septic is located other than "out back."

 

                                         landandfarm.com

If the appraiser can't locate these systems the lender will often order that the septic be found and the distances measured as a condition to close the loan.

  Since the appraisal happens about one third of the way into the lending process, it is highly recommended for the buyer to have a whole house inspection at the time of acceptance of the offer and ask the inspector to run the well tests and the dye test on the septic tank to determine if there are any issues.  If the inspector can't find the septic tank or field, more investigation needs to be done. 

  Personally I believe the time to find everything possible about your new acquisition is prior to closing on it whether the lender requires it or not. Once a property is closed, there are very few remedies other than litigation if it is discovered that there are issues with the well and septic system. If for instance the well is located too close to the septic system and the water has ecoli in it, (bacteria from human or animal waste) wouldn't you want to know prior to closing the loan? If you know early in the process it is possible to request that the seller put in a new well or the price of the home be adjusted so the buyer can put in a new well.  No lender will allow a closing to happen if the water is found to be polluted. 

  The week before closing is a bad time to find out you can't close a loan on your dream home in the country because of bad water or a non functioning septic system. Get these tests done early in the process-locate where these systems are. (I have had transactions in which several households are sharing one septic, or the well is located on the neighbor's land-it s good to know these things so that your well doesn't turn out to be nothing more than a wishing well.