Buying & Selling Real Estate
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated about 4 years ago,
Underground Oil Tank Found During Inspection
Hello BP community,
Some Background: Currently had an offer accepted on a Duplex in West Warwick, RI. Just did the inspections on Friday and found that there is almost definitely an underground storage tank (for heating oil) on the property that is not in use. The seller did not disclose it and may have been unaware of it. Either way I do not plan to move forward with the property without the seller being on the hook for taking the proper steps to "close out the tank". Talking with a couple of environmental companies around here they are telling me insurance/mortgage company will not go for the property with an underground tank that does not have the proper close out documentation. And that "close out" likely involves removal of the tank.
The seller is older, in her 70's I believe, and we did already beat the price down quite a bit from asking due to the fact that its only worth what it is worth to us based on the numbers (regardless of the hot market). Obviously they accepted and did not get a better offer at the time. We also heard from the sellers agent that the seller is just tired of putting money into the property.
The Question: If we cannot close on the property with conventional financing due to the tank, and the seller cannot afford to remove the tank she could be stuck. If they disclose the tank in the future, which they should, they will likely only be able to get a cash buyer and even then find one that wants to be liable for the removal. Simple removal could cost $3500 but if there is leaking into the soil it could cost $10k-$20k easily is my understanding.
Does this make this a potential seller financing deal? This would avoid the bank, although insurance could still be an issue I suppose. Could it be structured in a way that the seller finances, and we take care of the tank but the cost of the tank removal is credited off the loan at the end of the day? Curious as to your thoughts since I do not have experience in seller financing.
Thank you for any advice you can give!