REOs and septic tanks

[Bienes Raices]

Does the bank ever provide a septic report on the condition of the septic tank?

Do you pay to get a septic inspection during your inspection period? Has anyone had luck on getting the bank to come down on the price if it turns out the tank or the drainfield needs work? thanks.

[Steve Babiak]

I have not closed on any properties with septic, but I have come across a few and had similar questions. So I posed those questions to a listing agent who handles a number of REOs with septic.

Reports are unlikely; banks avoid disclosures. So, given that the borrower was not paying for the house, you can expect that they weren't paying to maintain the septic system (per the REO listing agent's words).

Therefore, assume the worst, and price your offer based on the system being totally gone. He indicated to just drop about $20K due to that, in the areas where he had his listings. And don't bother with the septic inspection before closing, since you've priced in the repairs already.

Once you close, and you have the septic system evaluated to get a real price to get it working, that septic company will do an inspection anyway - and if there is less to be done than the worst-case assumption you made up-front, that's good news to you.