You could look into an FHA 203K loan also.
Your agent should be able to help you with this dilemma. If not, look me up. I'll work with you in Staples, just a short drive from Hutchinson.
Replacing septic systems are very costly and in our neck of the woods it would be double or triple the amount you're being told. Best advice is to get as many quotes as possible. Especially in this economy, companies that want the business will work with individuals to get the business. Negotiate or have your representative negotiate this in your offer with Chase. Also some mortgage companies may require a working septic system as a condition of receiving the loan. Most sellers will receive Nothing or up to $3,000 in moving expenses so they usually have no money and are devastated about the process. Plead your case to Chase, as long as you are well qualified with nothing to sell that is the type of buyer these short-sale lenders want.
Best of luck to you,
Rob Hughes-Long and Foster Real Estate INC.
I'm not an expert on Septic Systems, but I have been there:
I question the $5500!!!
I cannot imagine that kind of a bill; I would suggest multiple quotes. The Bank will probably require them.
Good luck and may God bless