Home Buying in Massachusetts>Question Details

Michael, Home Buyer in Quincy, MA

When buyer pays for remaining heating oil, is it at todays rate or rate seller paid - (probably $4/gallon)?

Asked by Michael, Quincy, MA Wed Dec 10, 2008

Being a FTHB, I've been informed that prior to close the oil company comes out and estimates how much heating oil remains in the tank. From that point, I'm told, I pay the seller for the remaining oil at closing. My question is...If he paid $4/gallon, do I pay him according to that rate he paid or according to current rate which is more like $2.19/gallon in that area. My Agent tells me it is usually at the rate the seller paid. Please advise.

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In the past, when the price was not as volatile, you would typically pay what the seller paid at the time of the last delivery. Given the significant change in pricing recently, the rate would be the current market price per gallon. Best to have this agreed upon and built into the P&S so there are no misunderstandings at closing.
Web Reference: http://DavidBarnas.com
0 votes Thank Flag Link Thu Dec 11, 2008
As a seller's agent we are supposed to sell the house for the best and highest price the market will bear, as a buyer's agent we are supposed to help the buyer buy the house a a fair and equitable price. In my opinion, the price of the oil remaining in the tank should not be an issue and the seller should just not worry about it. Why, because there is no way of knowing exactly how much oil is left in the tank. The gauge probably has an accuracy of +/-25%. So if you are a seller, fill the tank for the new buyer and be done with it. Isn't this what happens when you buy a new car? The dealer fills the tank.
Cheers,
Ralph
1 vote Thank Flag Link Mon Sep 26, 2011
I would assume that it is at today's rate. It would be nice if the price stayed constant to what you paid a long time ago, but I don't think that it would work that way. We don't have a furnace that uses oil for heat in our home, but we have considered getting one. http://www.baystatefueloil.com/services.php
Flag Thu Jul 31, 2014
I agree. I think that the price should be what the current market says. If the buyer doesn't like that, you could try make some sort of arrangements that you both agree on. If I were a buyer I wouldn't mind paying the current market price. http://www.cardinalusa.com/services/ http://www.cardinalusa.com/services/
Flag Wed Jul 9, 2014
Hi Michael, I agree with the others. You should pay today's market price and not the rate when the seller purchsed it. Most importantly, did your buyer's agent mention it of the seller's side? If the seller, the seller's agent ,or their attorney hasn't mentioned it, then leave it alone. I had a closing two weeks ago , and I was the buyer's agent. I told my buyer not to worry about it unless the other side brought it up. We kept our mouths shut, and they didn't mention it. So, we got a half a tank for nothing. It is what it is...

Best of luck with your purchase!

Eric
1 vote Thank Flag Link Fri Sep 23, 2011
I just ran into this at my closing the other day. If there is time, you should make sure that it states you will pay todays market rate on the Purchase and Sale. If you are past the PandS date and are now reviewing it days prior to the closing, I would suggest having your attorney retrieve the receipt from the seller just to verify what they paid and try to negotiate from there.
0 votes Thank Flag Link Sun Sep 25, 2011
I am in the same boat. They are saying that the seller paid $4.49 per gallon and the going rate is somewhere between $3.20 to $3.55. MassEnergy, NewEnglandOil among other sites do not even list the 'highs' anywhere above $4.00 per gallon.
0 votes Thank Flag Link Thu Sep 22, 2011
Michael,
You should be paying market rate for the oil, just like you are paying market rate for the home. I would suspect that if the seller paid $1.00 for the oil he wold ask $2.19 the going rate. Stick to your guns on this, remember you are the only one at the closing table with money. Best Robert
0 votes Thank Flag Link Thu Dec 11, 2008
You typically pay the current market rate.
0 votes Thank Flag Link Wed Dec 10, 2008
Hi Michael,

It is usually the current rate at the time of the closing. It is customary for the oil company to visit the home the day of or a few days within the closing and conduct a final reading of the remaining gallons. Following the reading, there is a bill issued with the current gallons at the current rate that is brought to closing. Best of luck to you!

~Melissa
Web Reference: http://MelissaBMancini.com
0 votes Thank Flag Link Wed Dec 10, 2008
In my experience, the payment is for the rate that day. Usually, I have the oil company take the reading one or two days before the closing.
0 votes Thank Flag Link Wed Dec 10, 2008
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