Contributory value of new septic system?

[Elliott]

A new septic is a marketing feature. A buyer thinks to themself, "We'll that's one thing I won't have to worry about for that house."

 

[CANative]

A new septic is a marketing feature. A buyer thinks to themself, "We'll that's one thing I won't have to worry about for that house."

Yep. Not to mention the amenity of being the first one to use it.

 

[Mark K]

If you want to sound out opinions from widely varying markets, this is the place. If you want to see whether there is support for an adjustment in our market, you need to look at our market's data.



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This is it in a nutshell.

When I lived in the middle of a big sandbar (Michigan) my septic system was about the size of a 2 car garage and they were generally cheap to install. Need a new septic? No problem, no big deal.

Here in the middle of IN, the soils are not conducive to septics and new ones often cover over a 1/4 of an acre and can cost up to $25K. A new septic with an old house has value above marketing or reconciliation.

There are many vacant lots sitting around that are now unbuildable due to the changes the Health Dept. has made to septic requirements. There are also houses being used for storage because of septic failure and the Health Dept. refusing to issue a permit for replacement. Locals here understand the value associated with a new septic.

 

[Mike Garrett RAA]

Geeze, here we go again. Ok, you are not an appraiser...you are a buyer. You have two properties pretty much the same with the exception one has a brand new $15,000 septic system and the other has an older system that is functional.

If all else was about the same, which one would you buy first? Would you be willing to pay the same for both properties? Hmmm, probably not you say? OK, how much would you discount the one with the old system?

I'm willing to bet your market will say something like $5,000? Now, here is the rub. You are not a buyer...you are an appraiser and you need to make an adjustment for the system that will pass muster with your client. Depending on the price of the property a $5,000 adjustment for condition certainly wouldn't be out of line.

I would just do it, make a comment the condition is superior due to a new septic system installed on XXXXXX date at a cost of $15,000 and be done with it. Cost does not equate to a dollar for dollar adjustment but it certainly is a reasonable basis for some adjustment.

 

[Mr Rex]

Playing devils advocate, wouldn't the requirement for a new septic system raise red flags that there may be problems with the soils on the subject site? Perhaps this would offset any perceived increase in contributory value for a new septic versus an operational one that is not new.

 

[ctapraser]

Playing devils advocate, wouldn't the requirement for a new septic system raise red flags that there may be problems with the soils on the subject site? Perhaps this would offset any perceived increase in contributory value for a new septic versus an operational one that is not new.

Wait, there is no problem with the soil....the soil is just a little "muddy" in that area.

 

[CANative]

Playing devils advocate, wouldn't the requirement for a new septic system raise red flags that there may be problems with the soils on the subject site? Perhaps this would offset any perceived increase in contributory value for a new septic versus an operational one that is not new.

What sort of soil problem?

Did they have to replace the leach system too? Or just the tank?

 

[Mark K]

Playing devils advocate, wouldn't the requirement for a new septic system raise red flags that there may be problems with the soils on the subject site? Perhaps this would offset any perceived increase in contributory value for a new septic versus an operational one that is not new.

Not necessarily. Septic systems (leech fields or finger systems) will eventually plug up. Maybe in 20 yrs. maybe in 60, but they are generally not considered to be a perpetual item. Flushing things that shouldn't go into septics, excessive use of garbage disposal and greasy, non-degradable items, tree roots, all contribute to septic failure.

The only ones that don't wear out or need eventual maintenance are the old homes (generally the old farmsteads now split from the tillable acreage) that have just a tank and a drain line running to the nearest creek or over the back hillside, and unfortunately there are still a lot of these around.

 

[Mr Rex]

Actually a septic system that is properly installed and maintained is a perpetual system. The key is properly installed and maintained.

 

[JTip]

I wonder the situation that required a tank replacement.

Like Rex says, once in it pretty much takes care of itself. Suck it out every 5 years and you are good to go.