2 house buying questions - underground oil tanks and no basements..

[PrincessMommy]

Some of you may remember that I've been looking for a house since Feb.  I think we may have found one. Yay!   One thing I'm unfamiliar with is that it has an underground oil tank and I've heard conflicting information about them.

 

The current owners still use the oil, so I think that as long as we don't change to something other than oil we're okay.  But, then maybe not.  What if it starts leaking?

 

If we decide at some time to switch to natural gas (it's in the neighborhood), does anyone know how exorbitant the costs are to having it removed.  I had one friend tell me if we ever found a house with an underground tank to run away.  She'd heard it could cost upwards of 30K to have it removed because of EPA regulations.  Another friend said its about $1800.. and there are rarely any issues. 

 

I guess the first order is to find out how old the tank is.  The house was built in the mid 60s... but wouldn't the original have rusted by then?

 

The other issue is the house has no basement (and no garage).  It does have an attic with fold down stairs.  It also has a 12x24 outbuilding that has been used as a workroom.   The owner said there's storage up that "attic" of that building.   But it's not temp. controlled.   It also has a small shed we could store things like bikes and lawn mowers.  This issue we'll have to think long and hard if we want to lose all that potential storage space.  Right now my garage is pretty full.

[Seasider]

No idea about the oil tank. Sounds like a potential high expense.

 

No basement wouldn't be a deal breaker for me! Southern homes (far south) don't typically have them. The upside is it keeps you from hanging on to stuff you don't need. If you are used to having a basement, make sure that space is made up for in closet/storage/recreation areas on main/upper levels.

 

No garage would be more of problem. Pretty sure that would be a big no from dh.

 

Sorry I'm no help.

[Bambam]

No clue on oil storage tanks. 

 

We've never had a basement, so I don't miss one. I would, however, find it hard to move to a place with less storage space unless I could get rid of the stuff I store (which I would love, but there are other family members who don't agree!)

[Guest]

My dh refused to buy a house with a basement.  We were so done with leaks.  Talk about a money pit.  YMMV but honest to John, it was expensive.  Concrete fails after 40 years.  Sort of like humans.  :0) 

 

Oil tanks:  call around and find out some general bids.  We had to have one removed and I don't remember it being anything like $30K BUT the world has changed since then.  

 

 

[PrincessMommy]

No clue on oil storage tanks. 

 

We've never had a basement, so I don't miss one. I would, however, find it hard to move to a place with less storage space unless I could get rid of the stuff I store (which I would love, but there are other family members who don't agree!)

 

Yes, this is an issue at our house too.  :blush:

[Ottakee]

I would get a quote from a local place for tank removal.

 

Generally fuel oil is much more expensive to heat with than natural gas so you might want to consider switching sooner rather than later if you get the house.

[PrincessMommy]

My dh refused to buy a house with a basement.  We were so done with leaks.  Talk about a money pit.  YMMV but honest to John, it was expensive.  Concrete fails after 40 years.  Sort of like humans.  :0) 

 

Oil tanks:  call around and find out some general bids.  We had to have one removed and I don't remember it being anything like $30K BUT the world has changed since then.  

 

We have noticed that many of the houses we've looked at with basements have water issues.  They're all older homes in older neighborhood.  We looked at 4-5 more houses in the original neighborhood where we put a bid on the house.  Every house, but one, had issues.  

 

So you make a good point.  

[PrincessMommy]

I would get a quote from a local place for tank removal.

 

Generally fuel oil is much more expensive to heat with than natural gas so you might want to consider switching sooner rather than later if you get the house.

 

I agree.  However, the heating unit is less than 5yrs old, so we might wait and use the money on other things we want to do inside (like making more storage  space  :) ) 

Edited September 3, 2017 by PrincessMommy

[Frances]

Will they let you test the soil around the tank for leaks and contamination? We passed on a house when the owners refused to allow testing.

[CadenceSophia]

The oil tank is a little scary if this isn't your forever home. Growing up, my neighbor's tank leaked and they couldn't sell their house, so they had to rent it out for many (~15)years. Not sure if they ever managed to sell it. I'm not sure it is a deal breaker, but if this is a comparison between houses, the oil would be a pretty big negative. Plus it's so so expensive as heat!

[PrincessMommy]

The oil tank is a little scary if this isn't your forever home. Growing up, my neighbor's tank leaked and they couldn't sell their house, so they had to rent it out for many (~15)years. Not sure if they ever managed to sell it. I'm not sure it is a deal breaker, but if this is a comparison between houses, the oil would be a pretty big negative. Plus it's so so expensive as heat!

 

It's not as bad as all electric heat with a heat pump.  I hate that kind of heat.  In cost comparisons it runs in the middle.  Natural gas is cheapest.  Unfortunately, it is not as widespread around here compared with electric.  

[Butter]

No idea about the oil tank.

 

Houses where we live don't have basements.  It was kind of weird at first, but now I'm used to it.  We're sitting on rock so it would be quite a feat to dig a basement here.

[3 ladybugs]

That house would be a deal breaker for my 4 year old. He doesn't understand why hotel rooms don't have basements. LOL 

 

That being said, I grew up where we never had a basement. As long as you live in an area where tornados are not common then I think it would be fine with the rest that you are describing. 

 

Oil heat does need to be serviced every year. The people I knew that had it, pre paid or signed a contract or something for oil around this time of year and that usually included the maintenance. If you let the tanks get too low, you can get sluge in your system. Never a good thing. The contract thing was a locked in price for oil through the season. 

 

Personally I would take oil heat over electric ANY day. I had electric baseboard heat in upstate NY once... yeah I think it was more efficient to just burn money in the living room! 

[slackermom]

Some of you may remember that I've been looking for a house since Feb.  I think we may have found one. Yay!   One thing I'm unfamiliar with is that it has an underground oil tank and I've heard conflicting information about them.

 

The current owners still use the oil, so I think that as long as we don't change to something other than oil we're okay.  But, then maybe not.  What if it starts leaking?

 

 

Worst case scenario: If it is leaking, you have to notify the proper agencies within 24 hours. It is serious.

 

I know of 2 places that had heating oil leak from their tanks. In both cases, the whole yard had to be dug up and taken away. One was covered by insurance, the other wasn't. One was $70,000 about 5 years ago, the other $100,000 about 15 years ago. 

 

From the EPA website:

The cost of cleanup depends on a variety of factors, including the extent of contamination and state cleanup standards. The average cleanup is estimated to cost $130,000. If only a small amount of soil needs to be removed or treated, cleanup costs may be as low as $10,000. However, costs to clean more extensive soil contamination may exceed $130,000. Corrective action for leaks that affect ground water typically cost from $100,000 to over $1 million, depending on the extent of contamination.

https://www.epa.gov/ust/frequent-questions-about-underground-storage-tanks

[Pawz4me]

I'm not a fan of underground tanks of any sort, but it wouldn't be a deal breaker for us. My parents' house was built in the mid-1960's and has an underground oil tank. There have been no issues at all with it. They're deceased but my brother and I still own the house. He has a variety of hazmat certifications and is a FEMA certified home inspector. Trust me, he'd know if there were any issues!

 

A basement would come much closer to being a deal breaker for us than the underground tanks would. I don't know anyone who's had a problem with an underground tank but I know a LOT of people who've had problems with basements.

[ErinE]

Be careful about underground tanks as some companies won't provide you service unless they've installed and maintained it themselves. They don't want the liability associated with leaky oil tanks. I would be extremely hesitant about buying a house with an underground tank, but if you're set on it, I absolutely would not buy it without soil testing.

[Anne]

I wonder if you could contact the company that is currently servicing the tank (filling it and so forth) to find out if there are any issues. Also, would the tank status be included in a pre-purchase home inspection? I would definitely call a couple of local companies and ask what they know about oil tanks in that area.

 

Anne

[PrincessMommy]

I wonder if you could contact the company that is currently servicing the tank (filling it and so forth) to find out if there are any issues. Also, would the tank status be included in a pre-purchase home inspection? I would definitely call a couple of local companies and ask what they know about oil tanks in that area.

 

Anne

 

 

I don't know, but I'll ask my realtor.   

 

I will ask about getting the soil tested.  That's a good idea too guys.  Thanks!

[EmilyGF]

Our friends in NJ bought a house with an underground tank that had a policy that the oil company would take care of any leaking problems as long as they got a new (above ground) oil tank installed after it was fixed.

 

It was a good thing, too, because theirs leaked and they had to have the area of an Olympic swimming pool dug out of their yard.

So find out if there is such a policy in place. Without an insurance policy like that, I'd keep away from an underground oil tank in any state with any level of environmental protections. If you've got insurance, at least the money is covered even if it is a headache.

Emily

[Lucy the Valiant]

If you want to keep the oil heat (a 5-year-old furnace is a good investment!), you could ask the sellers to remove the buried oil tank and replace it with an above-ground one (they're usually 275 gallon capacity). 

[matrips]

If you google it, you'll see it's expensive. Especially if it leaks, because then the EPA is involved.

 

I'd keep looking and avoid the potential problem.

[madteaparty]

Our friends in NJ bought a house with an underground tank that had a policy that the oil company would take care of any leaking problems as long as they got a new (above ground) oil tank installed after it was fixed.

 

It was a good thing, too, because theirs leaked and they had to have the area of an Olympic swimming pool dug out of their yard.

So find out if there is such a policy in place. Without an insurance policy like that, I'd keep away from an underground oil tank in any state with any level of environmental protections. If you've got insurance, at least the money is covered even if it is a headache.

Emily

I know of someone in NJ with the same story. It was a ruinous exercise, if insurance or prior owner or someone didn't cover it. There was litigation over it if I recall.

For that reason I will not buy a house with a buried tank. Two houses ago there was one and we asked it be removed by licensed company as condition to closing.

[Selkie]

I wouldn't buy a house with an underground oil tank. As others have already said, leaks can be astronomically expensive.

 

Where I live (midwest), buried lp tanks are the norm but not oil tanks. People who still use heating oil have tanks in their basements (basements are the norm here, too, because of tornadoes). Dh has been in construction his whole life and said he has never known of anyone having a buried oil tank around here and would advise against it due to the horror stories he's heard about EPA cleanups.

[samba]

The home I grew up in (NJ) had a buried oil tank. When my parents switched to gas they looked into having the tank removed and it was going to be too expensive for removal and probably cleanup. My mother is still in that home and will most likely never be able to sell because the removal will be more expensive than her home is worth.

[MEmama]

When we switched from oil to natural gas, the plumber took the oil tank away for us as part of the conversion. It was just a tank in the basement, though, not underground.

 

IF yours is leaking, the homeowner is responsible for all clean up costs, including soil removal and any potential long term issues. With a tank underground, I don't know how you could have that inspected before purchasing the house, but I would definitely try.

 

TBH my DH would have never bought a house with oil except that's literally all that was available here. We switched to gas because the oil furnace was original to the house and really inefficient. We paid around $8-10,000 for the whole conversion; we'll never recoup the cost in energy savings but it had to be done.

 

He wouldn't have agreed to buy a house with a buried tank, no way.

[Starr]

How much would it cost to dig up and get an above ground system now ? 

[PrincessMommy]

How much would it cost to dig up and get an above ground system now ? 

 

I don't know exactly.  But, the previous house that we had a bid on did that and it was $1800.  There were no leaks or spills and I suspect the tank was just as old as the one on this house.  They had converted to gas years before and never removed the tank, so it sat empty in the ground. 

 

This is definitely something I'm going to work into the contract, if we move ahead.  The thing is, the tank was just filled and I think when you remove the oil that makes it "used" oil - not sure it can be put into another tank legally.  I wouldn't want to wait until after we buy the house to remove the tank either.  

[PrincessMommy]

I discovered there is a reimbursement program in my state for up to $20K to help if there is a spill.  

[madteaparty]

I discovered there is a reimbursement program in my state for up to $20K to help if there is a spill.

If there is a spill, 20k is maybe a drop in the bucket

[samba]

If there is a spill, 20k is maybe a drop in the bucket

 

Yes, NJ offered a reimbursement and it did not even begin to cover the projected expense.

[bethben]

My dad had a machine shop with a gas tank that leaked. It was in the tens of thousands in the 90s. I'm sure it wouldn't be as much but you should look into EPA regulations. They made my dad clean the soil around the tank. That's where the expense came into play.

 

 

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[QueenCat]

No clue on the oil. We've never had a basement (since adulthood).

[PrincessMommy]

My dad had a machine shop with a gas tank that leaked. It was in the tens of thousands in the 90s. I'm sure it wouldn't be as much but you should look into EPA regulations. They made my dad clean the soil around the tank. That's where the expense came into play.

 

 

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did they know there was a problem before they started digging?  I'm curious if there's a way to know the condition of the tank before workers start digging it out.   

[bethben]

did they know there was a problem before they started digging?  I'm curious if there's a way to know the condition of the tank before workers start digging it out.   

 

Yes.  Someone knew it was leaking.  The crazy thing is that he was a  block from an air force base.  If a pilot thought he had the possibility of crashing, he would dump his remaining fuel over the field.  My dad was like, "You clean up your soil, I'll clean up mine."  I'm also thinking the clean up was in excess of $100K now that I'm remembering.  For one tank.  Every time I hear of someone buying a place that has an underground gas/ oil tank, I just think about the expense if it should leak.

[MistyMountain]

There are records if there is an underground tank. When I did site assessments we always made sure there were no underground tanks for the people interested in buying property. My old employer helped in a clean up with an underground heating oil tank that leaked and it was a very costly clean up that was very involved. Then it can get listed on the EPA site.

[kewb]

Never again will I buy a house with an in ground oil tank. We converted to gas a couple of years after we bought our house and had the oil tank abandoned in place. The company pumps out the oil. Scrubs the tank clean, and fills with sand. Since we did that the laws in my state have changed and when we sell the house we will have to dig the tank up. Which will be expensive since the compressor for the central air is on top of the tank.

 

I have always had a basement with little to no leaking issues caused by nature. I like having basement storage/playroom. I am sure I would be able to adapt to no basement but I think I would miss it.