Removal of Underground Oil VS Legal Decommission of Tank

[Daljit S.]

Hi BP, 

I'm a new investor looking to close on my first house hack in North Jersey! I was able to find an awesome property and get my offer accepted. I'll be able to house hack and reduce my living expenses significantly, allowing me to save up more for my next deal. After I move out, the property will cash flow based on my estimates. I'm currently in attorney review and the only caveat is that there is an underground oil tank. 

 The seller is refusing to remove the tank, and will only pay to have it legally decommissioned in place. For those of you with more experience or have run into a scenario like this - would you move forward with the deal knowing that the seller will not remove the oil tank and will look to legally decommission it? Or would you pass on this opportunity?

 I'm interested in learning about the pros and cons of accepting the sellers terms and getting is legally decommissioned or walking away from the deal if the risk of buying the property with the underground oil tank is too great. 

Thanks! 

[Larry S.]

Hi @Daljit S.. I had a home under contract in Hudson county two years ago, and in the inspection an oil tank was found.  The home inspector's report in big, bold, red lettering said "DO NOT BUY THIS HOME WITH THE OIL TANK."  Under no circumstance would I have purchased the home without the buyer having it removed, and having the soil tested to make sure there wasn't a leak.  The purchase ended up taking six months from offer acceptance to closing, mostly due to the complications of the tank. 

Everyone has their own risk tolerance.  For my first house hack, I was not willing to take on a home with a known oil tank that could have lead to unknown issues down the line.  The way I looked at it was: either the seller would fix the problem and I'd end up with the property, or I would have learned a lot and saved myself a huge future headache.  The seller in my transaction was willing to remove it.  I would have walked if they didn't remove it.