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Selling a House With a Failed Septic System

November 17, 2020 | Lindsay Frankel Lindsay Frankel

A failed septic system can be costly to replace and make it a challenge to sell your home. Here’s how to get the best outcome according to your individual circumstances.

Your septic system ensures that the water entering your home is sanitary, so if yours has failed, you have a nasty mess on your hands that most buyers won’t want to take on. That doesn’t mean that it’s impossible to sell a house with a failed septic system, and it’s perfectly legal to do so in most cases, provided that you fully disclose the issue. Some local laws prohibit the sale of homes that aren’t up to code, so check with your real estate agent or attorney to see what your options are. In addition, here are some factors to consider as you prepare to sell your home

Signs of a failed septic system

Before you declare your septic system a total failure, consider hiring someone to inspect, pump, and clean the system. This should be done every three to five years for most septic systems, according to the U.S. Environmental Protection Agency. So it’s possible maintenance neglect could be the culprit. In fact, the International Association of Home Inspectors recommends annual inspections to keep your septic system functioning properly. That’s because a malfunctioning septic system poses health and pollution risks. 

The good news is, getting your septic tank pumped is relatively inexpensive. It costs an average of $399, according to HomeAdvisor. And when selling your home, most lenders and some local laws require an inspection anyway. 

In some cases, however, your septic system could be beyond repair. It could be the age of the system, faulty installation, or damage from nearby landscaping or construction. In any event, here are some signs your septic system has failed:

  • Water and sewage backing up into your home through the toilets and drains
  • Slow-draining bathtubs, showers, and sinks and slow-flushing toilets
  • Gurgling noises in the plumbing
  • Wet or damp areas or bad odors near the septic tank or drainfield
  • Lush grass growth over the septic tank or drainfield; grass should be brown

 

If you notice one or more of these red flags, it’s likely your septic system has failed. If this is the case, you have a few options for selling your home. 

3 ways to sell a house with a failed septic system

Repair or replace the septic system

When it comes to achieving the highest possible sale price for your home, repairing or replacing your septic system will likely be your best option. However, you’ll need a decent chunk of change to be able to accomplish this. Septic tanks cost an average of $6,278 for the tank itself and installation, but this number can vary based on the size of your home and your location. On the high end, you could pay upwards of $15,000. 

It’s also possible you could connect your home to a sewer line in your area, but this comes at a cost as well. You could be on the hook for $500 to $20,000 in fees from your city and an average of $1,500 in installation costs. However, keep in mind that a new septic or sewer system will be considered a capital improvement by the Internal Revenue Service, so you can add those charges to increase your cost basis. That means you may pay less in taxes on the profits from the sale. 

While you can usually get a repair or replacement complete in a matter of days or weeks, it’ll require some time, energy, and money on your part. On the bright side, a new septic or sewer system will open up the pool of potential buyers considerably, and you should be able to get a fair offer price for your home. 

Read More: Renovating Your House Before Selling

List on the market in ‘as-is’ condition

If you can’t afford to prepare your home for sale, you can list it on the market in its current condition. Some buyers may see this as an opportunity to get a good deal, but most buyers want turnkey homes. There are pros and cons to going this route. 

Pros Cons
  • Save money on repairs
  • Save time on negotiations
  • Move quickly if you find a prospective buyer
  • Reach a smaller group of buyers
  • Receive a lower offer price 
  • Potentially wait while your house sits on the market 

 

Keep in mind that most lenders won’t provide a mortgage for a house with a failed septic system, so you’ll most likely be working with a cash buyer. Furthermore, you’ll still pay real estate commission fees and closing costs. You can avoid spending any money preparing your home for sale if you sell off-market. 

Sell your home off market

If you don’t have the money to invest in replacing your septic system and you want to move quickly without the stress of a traditional real estate transaction, selling your house off market will likely be your best bet. You have a few options if you go this route:

  • Sell to an investor if you have an interested buyer
  • Sell to a fix-and-flipper and accept a low offer price
  • Sell to an iBuyer and accept costly fees
  • Request an offer from Sundae and get a $10,000 cash advance if you need it

 

Related: How Is Sundae Different from an iBuyer?

What’s the easiest and most cost-effective way to sell a house with a failed septic system?

If you’re aiming for the highest net proceeds, repairing or replacing your septic system yourself will most likely deliver the best results, but you should try to estimate your costs and make sure that’s the case. The easiest option, on the other hand, is to sell your house off market. You’ll save yourself the hassle of making repairs, hiring a real estate agent, and showing your home to potential buyers. 

If you choose to go this route, consider your options carefully to avoid getting ripped off. At Sundae, our mission is to give you a fair offer price for your distressed home. There are no hidden fees or closing costs to worry about, and the process is completely transparent. Your malfunctioning septic system has probably already given you enough of a shock, so you don’t need more surprises.

Contact Sundae today to learn more.

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