Home Buying in 02347>Question Details

Tim Slatt, Home Owner in 02333

I keep seeing "Title V Inspection Buyers Resp."...how often does that mean it will fail? Is it worth it to take a gamble and pay for the?

Asked by Tim Slatt, 02333 Mon Mar 12, 2012

inspection? If the listing doesn't specifically say "Title V Failed", does that more often than not mean the sellers just don't have the money for the inspection? We are approved for an FHA loan so if it fails, would we be able to finance the Title V into the mortgage? Is that the standard procedure with cases like this, where the potential buyer pays for the inspection, then makes a decision when given the result?

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When you see that items that are typically the responsibility of the seller in a normal home sale, it generally means it is a financially distressed sellers.

It can go a number of ways, if it passes all is good. If it fails it can mean a complete replacement, a partial replacement or a repair. FHA has a 203k loan available for repairs that would include a replacement of a septic system.

Definitely talk with your buyers agent, hopefully you are using one, and discuss what may be ahead of you. At the very minimum you are probably adding another 500+ in inspection fees and nver mind any repairs or replacement. if you don't move forward with the home you are out those fees.
1 vote Thank Flag Link Mon Mar 12, 2012
In my case, because I am trying to sell my home, the zoning requirements for a septic system in this town have been upgraded. So in order for me to be able to sell, the septic system must be upgraded to meet the new zoning requirements. A financially stressed seller may sell the house with "Title V upgrade", or "meeting Title V requirements" will be the reponsibility of the buyer.
0 votes Thank Flag Link Mon Aug 27, 2012
You can go to the local board of health/inspectional services and review the information on the private sewerage system. Date of install, inspections, date of pumping etc. This helpful in consultation with your real estate professional, inspection team, mortgage professional to review the history of the system, potential issues that might be involved and what to be mindful of. If you are unfamiliar with Title V, you can consult with a local private sewerage company, the local city/town will have a list of approved companies, you can see from the city/town list who last serviced it and see if there are any additional records available. Where you are unfamiliar with private sewerage you should absolutely educate yourself on the whole term & process, using a real estate professional that has experience with private sewerage system sales, consult with the private sewerage contractors you might have on your team if you decide to persue a property like this. They can assist you with a list of questions the seller could possibly answer, although if it's a bank owned property, there may be no direct knowledge of the systems so you'll need to rely upon expert advice from the correct professionals.

Hope this helps,
0 votes Thank Flag Link Mon Mar 12, 2012
Generally, you are going to see this with vacant bank owned properties. It could go either way.

If this is an occupied residence and you see this, it's a safe bet that it will fail although not in all instances. For the seller, passing this on to the buyer is a big red flag - not something one would do if they want to sell.

FHA requires that it pass Title V before they will insure the mortgage. Doubtful that you can roll that into the mortgage unless its a 203k.
Web Reference: http://www.matames.com
0 votes Thank Flag Link Mon Mar 12, 2012
The Title V would have to be repaired prior to closing (assuming the weather is OK which it is these days). That said the only way to close this without the septic repaired is by closing on a rehab loan. Since you are looking at a FHA loan this would be a 203K or 203K Streamline (35k or less in repairs).

There are plans, drawings and approvals from the town Board Of Health that must be done prior to starting septic work. Since it seems this would be your responsibility, that is a bit of work and money to be spent before you even own the property. I think it may me wise to move on.
0 votes Thank Flag Link Mon Mar 12, 2012
Usually when you see things that are traditionally the responsibility of the seller, become the responsibility of the buyer as a condition of the sale, it just means that it's likely a distressed property. So yes, either the seller doesn't have the money to pay for it or it's an REO. It doesn't mean it will fail, but it does mean there are terms and conditions of the sale that will become your responsibility.

You should get items out of the way up front, ie, inspections, smoke certificates, Title V, so that way you will have no issues when you are ready to close that may hold up the closing.

Buying any property is a gamble, so just be prepared that nothing is set in stone. Do your due diligence so you can make an informed decision about the property in question. GOOD LUCK!

Maryann Little, VP Mitigation
Short Sale Mitigation, LLC
@rapidshortsales - twitter
0 votes Thank Flag Link Mon Mar 12, 2012
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