Orangeburg Sewer

[Michigander]

First off, the appraisal is for a foreclosure

Our area has a lot of Orangeburg sewer tiles, most of which are starting to fail. Some houses have experienced a reduction in sale price or concessions towards fixing it, although the majority do not seem to have done so. I think that few Realtors are encouraging the inspection of this piping, which could be the reason that many do not have price reductions. Cost to cure this is in the $8,000-$15,000 range for most properties. Permits show up in the city assessors records so you can see if someone has had it replaced or not. Not every house has it, but the neighborhood I am appraising in has a history of it.

Should I make a REO contingent upon an inspection to see if it indeed has failing sewer pipes, or should I just comment on the history of it and that there is no definitive answer on whether buyers are just accepting it (like with a roof with 5 years to go) without penalizing?

Keep in mind this is a REO. What would YOU PERSONALLY do?

thanks in advance,
Rachel

 

[xm39hnu]

Rachel,
Personally, I'd flush the toilets during the inspection. If there's no slow flow apparent, and if the toilet doesn't "burp" a bubble of air after a flush, I'd comment on the general problem and state that only an inspection by a qualified expert can determine whether the subject's sewage lines need to be replaced.

One reason your market is showing concessions in some sales, but not generally, is that most buyers don't know Orangeburg sewer lines from a Happy Meal. Cost me $600 to replace my 5" Orangeburg service line with a 6"PVC a couple of years ago, including asphalt saw, ditching machine, plumber, and permits. My thundermugs are happy now.

 

[Mountain Man]

Ditto with Jim. If the systems appears to be in working order, flushes normally, then I'd just note the problems in general, and recommend an inspection if the client has any other concerns.

All the sellers and Realtors care about...... are the utilities in working order at the time of sale? Six months or a year down the road is not relevant. That's why a home inspection is highly recommended.

 

[Francois K. Gregoire]

Rachel,

Some of this may be governed by your agreement with your client, any supplemental standards (or client specified conditions) and the scope of work. Take a look at your engagement letter or their standards.

If this particular assignment is being reported on a Fannie Mae 1004 and you are using the Fannie Mae 1004B (6-93) as your Statement of Limiting Conditions and Certification, take a look at paragraph 6 on page one of the 1004B.

If you are not comfortable with the language, and cannot, in good faith, ink your name to page 2 of that form, have you considered completing the appraisal report under an Extraordinary Assumption?

You may be able to describe the history and sewer line probems experienced by other, nearby, similar properties. You could follow that with your belief (if true) there is not a problem with the subject property sewer line and state your opinion of value is made under that Extraordinary Assumption and if it is found to be false, your opinions and conclusions may be changed.

Just one way of dealing with your situation......clean and painless.

 

[Michigander]

Frank, that was an incredibly sensible answer!

 

[Francois K. Gregoire]

Originally posted by Rachel Massey@Jan 21 2004, 11:46 AM
Frank, that was an incredibly sensible answer!

Rachel,

Believe it or not, the USPAP is our friend!

 

[Michigander]

Oh I believe it, I am one of the boards "USPAP nazi's" good stuff, just didn't think about putting it as an extraordinary assumption.

 

[Jungle Boy]

My EA is that we can have our our sewer fixed by this weekend, so that we don't have to leave home for # 2 s.

Probably roots.

 

[Farm Gal]

FWIW...

Single flush tests seldom indicate a problem!!! I would NEVER depend on a single flush to determine anything!!! Think about it: a clog/failure is almost never a 1.5 or even 3 gallon flush away from the stool!!! 4" pipe guys/gals!!!!

Filling a bathtub up and then letting it drain AND doing a power flush is a more likely trouble spotting method...

I would rely on Franks comments AND keep a close eye on local market reactions...

Failing orangburg pipes often tend to slowly decompose by collapsing into a oval, rather than the more swift/suddden failure often seen in other types of pipes. Often folks have them repeatedly roto-rootered leaving nothing but shreds of pipe and a hole through the middle...

Use after minimal water passage or protracted vacancy tend to result in catastrophic failure. REO's are classic 'prone to failure' for this reason.

Single flushes can work thier way through for extended periods of time with no problem, but sudden gushes of water in higher volumne such as are generated by some washing machines... even some dishwashers compounded by a shower running can cause really ugly messes.

Kids in potty training or certain persons <_< proclivity to use wads of TP can contribute to temporary problems that are intermittent in nature also.


New buyers tend not to ASK that question and unless warned by a 'helpful' nighbor this tends not to be a value issue in most areas... unless the paper just ran an expose'

ALSO watch out for orangeburgs running UNDER major throughfares to old sewer lines across the way. Never mind the sawcutting and streetrepair costs... the traffic diversion costs can run into the thousands!

 

[Michigander]

This is an interesting topic, but somewhat like a furnace or a roof (to a degree). They all have certain life expectancies, and we know they are going to need to be replaced at some time or another. Orangeburg is no different, and if you have it you will need to replace it (or the next buyer) at some point. The cost in my area has been quite high, in the 8K-15K range (someone mentioned considerably less). The Realtors are being educated about it by some of the contractors replacing it. If I were buying a home built in the time frame it was being put in (isn't it from the early 50's through the late 60's? then I would want to have it checked out, unless I was getting a steal on the house to begin with.

Certainly haven't seen much evidence about the value being lower if it has it (in certain neighborhoods), even though I've seen some sellers kicking back the cost of the repair, others have not. I'd love to hear more about what others have seen in their area. In mine it seems to be more like a roof or furnace issue. We are having more problems with LP siding than with Orangeburg.