Ultimatum

Well, well, well. Yesterday morning I met the contractor and the engineer for the septic excavation test at my parents’ house. We lucked out in that a big storm just north of us only gave us a little rain before the hole was dug. A section of the fence along the driveway was removed and the backhoe was driven over the poor daylilies on the way to the back yard. They dug down at least eight feet until some ground water began to seep into the hole. The dirt was excellent, as expected. Since this was once a vegetable garden, the topsoil layer was deeper than usual. Below that was sandy soil – excellent for drainage. The engineer took measurements and I expect a design in hand some time next week. At that time I’ll find out the cost of the project and can bring the plans to the township for approval after paying the obligatory fees.

Backing up a bit, my lawyer sent the buyer’s lawyer a letter at the beginning of the week advising that they had not responded to our letter where we outlined the repairs we were doing and stated that we were not addressing the minor issues that the buyer wanted “repaired” from the original home inspection report. I had been willing to give them a credit for those items, but my lawyer felt that we were already spending a fortune on the oil tank and septic, so it was reasonable to deny the minor items (GFI protect some circuits, replace a few 2 prong outlets with grounded outlets, “repair” the front and back exterior stairs) called out. He told them that a response was required or the contract would be terminated.

The buyer’s lawyer responded yesterday. Basically, they came back with the same conditions, including the required replacement of the oil tank, septic, and all of the minor items at our expense. In our prior response my lawyer had not specified that we would replace the oil tank, but that we would be taking required action on it. I sat on the response overnight.

One thing learned in my chat with the engineer on Wednesday morning was that the new septic could only be designed for the number of bedrooms on record with the township tax department. We had listed the house as a 4 bedroom, though there was a question about the main floor rooms that now have no closets. When the house was built, there were only 2 bedrooms. My parents had a dormer added to give us 2 more bedrooms upstairs and my father removed the wall between the 2 downstairs bedrooms to make a single “master” bedroom. The front bedroom space was all built-ins that I removed and I restored the wall between the rooms. Anyway, it appears that the tax records show a 3 bedroom house, which now complicates matters somewhat. We advertised a 4 bedroom house, so we must now disclose that the house is a legal 3 bedroom. Even though the downstairs rooms can be used as bedrooms, one of them isn’t a bedroom.

I advised my lawyer to respond as follows:

• We are replacing the oil tank with an above ground tank and that we are assuming all risk associated with the replacement. If soil contamination is observed or suspected, any testing and mitigation is at our cost. I’m told that this could be $10,000 to remove a truckload of contaminated soil and bring in a truckload of clean fill. The gamble is that we are 98% certain that the tank didn’t leak based on our soil sample test a few months back and the site soil conditions. Keep your fingers crossed. Cost without soil replacement or testing will be between $3600 and $4000.
• We are replacing the septic with a new system, disconnecting the laundry sink from the old dry well and water supply, and adding a drain pipe for the washing machine. The cost so far is $1750 for the engineering and 450 for the test digging. Permits and interior plumbing for the laundry sink and drain are extra. The ballpark estimate for the new system construction was between $12-15,000. Since we now know it is a 3 bedroom house, and the conditions appear to be good for drainage, I expect that the total replacement will be in the neighborhood of $16,000 complete, though it could be more.
• We are not willing to address any of the minor issues from the inspection report. Enough is enough.

I expect that he’ll send them our response late today or tomorrow with a statement that we will not be negotiating any further and they are welcome to proceed on our terms or cancel the contract.

If the buyer decides to be stupid and back out over the minor items, we will be re-listing the house and hoping to recoup some of the expenses of these repairs. I’ll probably address the inspection report items, too, to prevent them from getting in the way for the next offer. We would change the listing to advertise a 3 bedroom house with new septic and new oil tank. We shall see.

UPDATE: Moments after posting, I received a call from my lawyer. The buyer’s lawyer responded accepting our revised terms. Now we await the buyer’s final mortgage approval and escrow amount as we proceed towards the closing. Of course, the oil tank and septic tank fun will also continue…