Gloria: Sad to say, Marc is probably right. (I'm not sorry about Marcâ€™s being right, I'm sorry that the situation seems to be heading in the way he describes.) The underground storage tank is an idea whose time has "went." Our mutual colleague, Ken Verbeyst has a horror story of HUNDREDS of thousands spent on ONE tank! I sold a property with an underground tank just last fall but only to a second investor, the first being wise enough to drop the purchase. I note that the second investor is flipping the property now.
The in-ground tank is not illegal as it stands now but who knows when it will be? There is funding available for removal and if there is no contamination, you're home free with little cost, in comparison to the cost of the property. There is, of course, the gamble that there is contamination and additional costs but if you gamble, don't fix the problem and the situation gets worse, you face higher costs in the future.
Filling the tank with sand is not an especially good idea. Twenty years ago, it may have been ok, since at that time few underground tanks in residential properties were failing. Now, the problem is well known and to fail to disclose a known detrimental condition would open liability to legal action. The procedure itself is not cost free. You have to dig up the top of the tank, cut it open (It's very hard to get the sand into an old tank through the fill pipe) and shovel the sand in. Finally you have to back fill the hole. This costs money too and since there is the state funding available for removal, it would seem silly to fool around with a half measure that was just more trouble waiting to happen.
I'm a minimum cost kind of guy but in this case, I think the appropriate minimum is removing the tank before purchase. If the seller can't or won't do it, add it to the cost of purchase and figure you offer accordingly.
Best of Luck.