Buying Land: Understanding the Risks of Purchasing Land With Wells and Septics
Buying Land: Understanding the Risks of Purchasing Land With Wells and Septics
The biggest risk in buying land is buying unimproved (raw land) land rather than improved land. Unimproved land has none or some of the following: no well, perc and mantle (water absorption test) or power access. These problems are non-existent in the city or where water and sewage is piped.
In rural areas, spetic, water and power hook ups can be very expensive and in most cases, the seller will ask the buyer to pay for and perform all inspections and tests and pay for all hook ups on the land. In the case of buying unimproved land, it is important to ask a lot of questions to the listing agent about the history of property. This is the biggest mistake the buyer can make. It is illegal for a seller not to disclose if they tried to dig a well or performed a perc and mantle test on the property. It is unlikely that a seller would not have performed these test if they have owned the property for some time. In some cases, the land may be an inheritance and the seller has not had time to perform tests or if the land has become recently acquired, this may also be the case that time has not allowed for tests.
It has been my experience, as a lender, that in cases where there have not been any tests on unimproved land, either digging for a well or a perc and mantle, it ends up being extremely expensive to resolve. In the case of power, the preliminary title report will report power lines next to the property. If it does not, one should inquire how much it will cost to bring power in by talking to PGE.
One should not just accept having to dig for a well or perform a perc and mantle and pay for it out of pocket, even though this is the accepted practice in our county if one suspects that these reports and tests have already previously been performed. If one carefully inspects the property, there is usually evidence if a the seller tried to find a well or test for perc and mantle, there will be holes and upturned earth showing such. In this case, I would definitely not pay to perform these tests and would negotiate with the seller.
The costs for investigating water and waste absorption (perc and mantle) can be very expensive, especially if the well water is deep and the sceptic needs engineering. As a buyer making an offer, you should definitely cap the costs you are williing to pay since it is possible a succesful well or perc and mantle (or both) may not happen. Wells can range from $500 to as much as $5000 depenidng on how deep the well is. And it is possible to dig up to 1000 feet, or dig in several places and not find water at all.
SUUMARY:
Aks the seller lots of questions about the history of the land and if any of these tests have been attempted or performed. Cap the cost of water well searches to $1000 to $1500 and to the cost of a perc and mantle test or agree to have the seller pay for some or half of these costs.
Ralph Migliozzi
Broker Originator Serving Northern California
NMLS 282851 DRE #01002038
(p) 530-330-3073
