Title V does mean that the system has passed current standards, but you should take the time to review the inspection, understand the system in place, and evaluate it, using local experts where necessary. You wouldn't buy a house without knowing if the roof is in good shape or not, and a septic system works the same way. Unlike a roof though, you can't "see" it, and I think it's this unknown quality of septic that gives buyers pause. It's an important - and expensive - system for you house, so you should carefully evaluate it. It's not necessarily straightforward either - "old" is not necessarily "bad" and "new" is not necessarily "good", although I have found that some people are quick to race to those determinations.
It has become customary for sellers to be responsible for Title V for a simple reason; most banks won't lend on a property with a failed system. So when we see "seller responsibility" what it really means is "hard to borrow money against". As you can imagine, that significantly reduces the number of people who can purchase the property, so I often find that these properties sell for 30-50K below market. Most people who purchase have done a septic replacement before, and understand the in and outs, and that's a good thing - the process, while not overly complicated, is confusing to newbies, and is time consuming, expensive, and often involves a great deal of red tape.
Matt Heisler is a real-estate professional and owner of Heisler & Mattson Properties. He has been selling residential real-estate for over 10 years. He has given several talks on real estate, including presentations on first-time buyer tips & tricks, and profiting in real estate investing in Massachusetts. As a Vanderbilt University alumnus, he is proud to serve the communities of Natick, Framingham, Medfield, Millis, Holliston, Hopkinton, Southborough, Westborough, Northborough, Grafton, Marlborough, Shrewsbury, Worcester, Milford, Charlton, Northbridge, Sutton, Hudson, Sudbury, Clinton, Boylston, and West Boylston. His company website can be found at http://www.bjheisler.com, and his Metrowest Blog can be read at http://HomeSellingInMass.net.
*All information is posted in good faith and is assumed to be reliable, but may rely on third party information sources.