Can I sell my home with a failed septic?

Asked by lostandconfuzed, Fort Wayne, IN Sat Aug 27, 2011

I may have to put my home up on the market quickly, at the moment we have a failed septic system - we are pumping frequently. Is it legal in Indiana to sell your home with a failed septic? I would disclose it - of course but do I have to fix it before selling?

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Sarah Goulart…, Agent, Plymouth, MA
Sat Aug 27, 2011
I'm not familiar with the laws in Indiana, but in Massachusetts, this is possible. The biggest hurdle is financing, so homes with a failed septic need to either be cash buyers or obtain special financing (normally a 203K loan). This seriously limits the pool of buyers for your home, but again, it is possible.

I would speak with a real estate agent about your options. Around here, there are also septic installers who will install (normally after buyer's mortgage commitment) and take payment from the proceeds at closing.
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Suzanne MacD…, Agent, Morristown, NJ
Sat Aug 27, 2011
I don't know the local laws, however, I know this can be an issue for the buyer. They will not be able to get an FHA backed mortgage unless they go for an FHA 203K mortgage. You may want to see if you can find a realtor who is an FHA 203K specialist. Look for someone at http://www.rebuildusa.com. The problem is, otherwise, you will be limited to people who are eligible for either a conventional mortgage or paying cash. It eliminates a huge pool of buyers. If local ordinances and so on permit, you may still be able to sell the home, but expect buyers to want a discount.
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