Another Real Estate Problem - Escrow

[jfn111]

The one time I've dealt with this the Seller hired the contractor, the price was agreed upon. The work couldn't be completed until after closing so the money was escrowed at 1.5 times the bid. The contractor did the work for the agreed upon price. The excess was refunded.
It wasn't that complicated that attorneys needed to get involved. YMMV

[travelover]

Quote:

Originally Posted by jfn111 The one time I've dealt with this the Seller hired the contractor, the price was agreed upon. The work couldn't be completed until after closing so the money was escrowed at 1.5 times the bid. The contractor did the work for the agreed upon price. The excess was refunded. It wasn't that complicated that attorneys needed to get involved. YMMV

Let's hope it is that simple. It never seems to be for me, but then I'm only 64.

[youbet]

travelover,

Are you going from a traditional to a mound system?

[youbet]

Quote:

Originally Posted by travelover I'm not attorney, but I think the contractor basically needs to meet the permit requirements to get paid. If permit specifications are fulfilled, then system passes. In my particular case, the system is so over designed, there is no doubt it will function properly.

While the system may seem "over designed" to you, try to remember that the county is on the hook to ensure safe water, freedom from odor and environmentally friendly operation on an ongoing basis. This is why many systems are now "mound" systems and are expensive to install.

The new home owner might be satisfied if the toilet flushes and the sinks drain, but neighbors whose well has a high bacteria count decades from now might feel differently.

Control of the title process (the house changing hands) is the county's opportunity to get things up to modern standards and they aren't going to let that opportunity go by. It's the time when all not-up-to-code situations come home to roost.

You've got a good attitude about the situation. Just do what you can to ensure it doesn't cost you $35k to have a $25k new septic system installed.

[travelover]

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Originally Posted by youbet travelover, Are you going from a traditional to a mound system?

No, but I feel like I'm paying for one. The still working, 51 year old system is a simple 1200 gallon single chamber tank with a four leg, 800 square foot gravity flowed field. The new "required" field is 1200 square feet, has a second dual chambered 1500 gallon tank with a pump and 290 tons of washed gravel.

Quote:

Originally Posted by youbet While the system may seem "over designed" to you, try to remember that the county is on the hook to ensure safe water, freedom from odor and environmentally efficient operation on an ongoing basis. This is why many systems are now "mound" systems and are expensive to install. The new home owner might be satisfied if the toilet flushes and the sinks drain, but neighbors whose well has a high bacteria count decades from now might feel differently. Control of the title process (the house changing hands) is the county's opportunity to get things up to modern standards and they aren't going to let that opportunity go by. It's the time when all not-up-to-code situations come home to roost. You've got a good attitude about the situation. Just do what you can to ensure it doesn't cost you $35k to have a $25k new septic system installed.

I'm all for safe disposal of effluent, but it does not have to cost this much to do it. I had an addendum added to the purchase agreement to allow me to better control the spending and I'll work with the contractor to minimize the costs while installing a more than adequate system.

[ERD50]

Quote:

Originally Posted by travelover No, but I feel like I'm paying for one. The still working, 51 year old system is a simple 1200 gallon single chamber tank with a four leg, 800 square foot gravity flowed field. The new "required" field is 1200 square feet, has a second dual chambered 1500 gallon tank with a pump and 290 tons of washed gravel. I'm all for safe disposal of effluent, but it does not have to cost this much to do it. I had an addendum added to the purchase agreement to allow me to better control the spending and I'll work with the contractor to minimize the costs while installing a more than adequate system.

But if the old field has failed and/or is saturated, or was never really designed all that well to begin with (though it may have 'gotten by'), then you may very well need to bring in gravel and sandy/loam soil.

Two chambers and a pump seems like a lot, but it depends on what you are facing. I'm sure guidelines are stricter than what they were many years ago, so comparisons may not be that helpful.

Septic is also sized by # of bedrooms, an imperfect measure, but if you have more bedrooms they will require a larger field, regardless of how many people live there (they can't control that as easily).

-ERD50

[travelover]

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Originally Posted by ERD50 But if the old field has failed and/or is saturated, or was never really designed all that well to begin with (though it may have 'gotten by'), then you may very well need to bring in gravel and sandy/loam soil. Two chambers and a pump seems like a lot, but it depends on what you are facing. I'm sure guidelines are stricter than what they were many years ago, so comparisons may not be that helpful. Septic is also sized by # of bedrooms, an imperfect measure, but if you have more bedrooms they will require a larger field, regardless of how many people live there (they can't control that as easily). -ERD50

I'm going by what the contractors told me that install systems all over the state. In this particular county, the guy that writes the permits gets to invent the rules and no contractor wants to get on his bad side, even if his standards are higher than the actual code.

[ERD50]

Quote:

Originally Posted by travelover I'm going by what the contractors told me that install systems all over the state. In this particular county, the guy that writes the permits gets to invent the rules and no contractor wants to get on his bad side, even if his standards are higher than the actual code.

Yes, you really can't afford to get on the bad side of the person who has to approve the permits. Gotta pick your battles.

If I were to stay there, the pump would bother me. That's an ongoing maintenance item, and electrical expense. But other than initial cost, that's not your problem.

-ERD50

[pb4uski]

That does sound a bit excessive. We put our system in in 2007 and it is a 1000 gallon septic tank that flows into a roughly 300 SF engineered leach field that is on a bed of sand... designed for 3 bedrooms. And that leach field is about 50' from a public lake.

[brucethebroker]

Travelover, two additional ideas.

Have your Realtor check with his/her state association and see if a free attorney is available for quickie advice. Our state provides this service (by phone) for free, to the managing broker of each office (the broker will have to make the call-not you).

Second, our title companies (and I have used dozens) usually offer the same service for customers. In our area, title companies have at least one attorney as owner/mgr., and it can be a great help.

In either situation, just ask what forms are necessary to protect YOUR concerns. The Realtor assn. may have a free form available. The title company may charge a modest fee to provide one (usually $30 or so in our area).

BTW, Can you let the deal die (legally, financially, emotionally?) Seems like living there another 6 months, and having control over who does the work and at what cost would be a good option. Then you are offering a home with a new "gold standard" septic system. It might even list for more money.

[travelover]

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Originally Posted by brucethebroker Travelover, two additional ideas. ............

Thanks for the suggestions.

I think I have it handled. At the advice of the title company, I had an attorney draft up an addendum that clearly states that I am only paying for tasks that are in the contractor's bid. Though I am moving out, I'll be two miles away and will work with the contractor, who understands my concern about containing costs. If he is telling the truth, we should be able to contain the costs. If he is lying or the buyer wants to be a PITA, then it will be more difficult. Worst case, I lose the remaining money in the escrow and get on with my life.

[MichaelB]

Quote:

Originally Posted by travelover Thanks for the suggestions. I think I have it handled. At the advice of the title company, I had an attorney draft up an addendum that clearly states that I am only paying for tasks that are in the contractor's bid. Though I am moving out, I'll be two miles away and will work with the contractor, who understands my concern about containing costs. If he is telling the truth, we should be able to contain the costs. If he is lying or the buyer wants to be a PITA, then it will be more difficult. Worst case, I lose the remaining money in the escrow and get on with my life.

Sounds like a good plan to me.

[tps7742]

I missed where you are located but from my experience the cost of the system will depend on the size of the house, location to the nearest natural water drainage, old or new, amount of acreage, type of soil, etc. We just had a new installation on a new home and it cost approximately 6600.00 (plus permits) for a home with 3000sq ft heated/cooled space with 3 bathrooms. The type system was an aerobic system and it took them approximately 1.5 days in and out for the installation. Now mine was installed in a rural area with good soil and no rocky terrain. The county requirements are getting allot stricter on septic systems due to the water quality issues. Now I would get a legal document with specifics to spell out the process with your input and guidance.

[tps7742]

Quote:

Originally Posted by travelover Thanks for the suggestions. I think I have it handled. At the advice of the title company, I had an attorney draft up an addendum that clearly states that I am only paying for tasks that are in the contractor's bid. Though I am moving out, I'll be two miles away and will work with the contractor, who understands my concern about containing costs. If he is telling the truth, we should be able to contain the costs. If he is lying or the buyer wants to be a PITA, then it will be more difficult. Worst case, I lose the remaining money in the escrow and get on with my life.

Sounds like you have it covered. Good luck

[REWahoo]

Quote:

Originally Posted by MichaelB Sounds like a good plan to me.

+1, especially this part:

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...and get on with my life