Selling a Home With a Septic System or Private Well: What Buyers, Inspectors and Lenders Will Ask For
What You’ll Learn
- Which septic and well records to gather before you list, and where to find missing ones
- How septic inspections and pumping differ, and why timing them matters
- What well water tests and flow tests generally check, and why results can expire
- How local rules at sale and FHA, VA, USDA and conventional loan requirements can come into play
- What your options are if a test or inspection turns up a problem
Selling a home with a septic system or private well usually means a few more questions from buyers, inspectors and lenders than a home on public water and sewer. Who maintains the system, how the water tests, and whether the system meets local rules can all come up between the offer and closing.
Most of these questions can be answered before you list. This guide covers what to gather, the inspections and tests buyers often ask for, how local rules and loan programs can come into play, and what happens if a problem turns up. For routine upkeep while you own the home, see septic system maintenance.
Why a Septic System or Private Well Adds Steps
With public water and sewer, a local utility is responsible for treatment and testing. With a private well and septic system, the owner is. That shifts a few things onto the sale:
- Buyers often want independent information about the water and the septic system before they commit.
- Some states, counties and towns have rules that apply when a property with these systems is sold.
- The buyer's lender, appraiser or loan program may have its own requirements.
None of this has to slow a sale down, but each step takes time to schedule. Starting early leaves room for results, and for fixes if needed.
Gather Septic and Well Records Before You List
Records answer many questions before they're asked. A useful file often includes:
- Septic permit and system drawing. The original permit and any as-built drawing or site plan showing where the tank and drain field are located. Your county or local health department may have copies on file.
- Pumping and service records. Dates, the company's service reports and any notes on tank condition.
- Septic repairs or replacements. Permits, invoices and any final approvals.
- Well records. The well driller's log or well completion report, if available, along with any pump or pressure tank replacements.
- Past water tests. Lab reports, with dates.
- Water treatment equipment. Manuals and service records for softeners, filters or disinfection systems, and whether they convey with the home.
If you don't have these, start with the local health department or permitting office. For a broader list of what to hold onto, see home records: what to keep.
Septic Inspections and Pumping
Buyers often hire a septic inspection, separate from the general home inspection. A general home inspector may not evaluate the tank or drain field in detail.
What a septic inspection includes varies by inspector and by local rules. It may involve locating and opening the tank, checking levels and baffles, looking for signs of trouble in the drain field area, and running water through the system. Some inspectors need the tank pumped as part of the process.
Pumping and inspection are related, but they aren't the same thing. Pumping removes solids from the tank. An inspection evaluates how the system is working. If you plan to pump before listing, ask an inspector first how pumping should be timed around an inspection, so you aren't paying for it twice.
For general maintenance, the U.S. Environmental Protection Agency says the average household septic system should be inspected at least every three years and that tanks are typically pumped every three to five years. Records showing regular service can be helpful to share with buyers.
Well Water Testing
Buyers commonly ask for a water test, and some lenders and local rules require one. The CDC and EPA recommend testing private wells at least once a year for total coliform bacteria, nitrates, total dissolved solids and pH. The CDC also suggests checking with the local health department about other contaminants to test for in your area.
A few practical points:
- Use a certified lab. Many state health or environmental agencies certify labs for drinking water testing.
- Who collects the sample can matter. Some loan programs, lenders and local rules require that the sample be collected by a third party, such as the health department or a lab, rather than the owner.
- Results can expire. A lender or local rule may require a test taken within a certain period before closing.
- A test is a snapshot. It shows what was in the sample on the day it was collected.
Treatment systems can affect results, so make sure the lab and the buyer know where the sample was taken and whether the water had been treated.
Flow and Yield Tests
Some buyers, lenders or local rules also ask whether the well produces enough water. A flow or yield test measures how much water the well delivers over a period of time. Standards and methods vary, so ask the buyer's inspector or a licensed well contractor what test is being used and what it measures. If you know of past low-water issues, such as in dry seasons, disclose them as your state requires.
Local Rules for a Septic System or Private Well at Sale
Rules for selling a home with a septic system or private well vary widely. Some states, counties and towns require a septic inspection, a well evaluation or both before a property changes hands, and some require the report to be filed with the health department before closing. Others have no sale requirement at all. Some set who may perform the inspection, such as a certified or registered inspector.
Because these rules are local, check with your county or local health department, or ask your agent or closing agent, early in the listing process. Requirements can include deadlines that affect the closing date.
What Lenders and Appraisers May Ask For
If the buyer is financing the purchase, the lender and appraiser may look at the well and septic system too. Requirements vary by loan program, lender, state and county, and they can change. In general:
- The appraiser notes the water and sewer source. If the appraiser sees signs of a problem, the lender may ask for an inspection or test before closing.
- Government-backed loans have well and septic standards. FHA, VA and USDA loans each have property standards that address private water and sewage systems. For FHA loans, HUD's guidelines call for well water to meet the requirements of the local or state health authority, or EPA standards where there are none. For existing homes, FHA currently allows the distance between a well and septic components to follow the local jurisdiction's requirements when acceptable water test results are documented, and HUD has proposed further updates to its property requirements. VA and USDA have their own standards.
- Conventional loans vary. A lender may require a water test or septic inspection based on its own guidelines, the appraisal or local rules.
- Timing matters. Some programs and lenders require results dated within a set period before closing.
The buyer's licensed loan officer can explain what their loan requires. Sharing your records early can help that process move along. All loans are subject to lender approval.
Consider Finding Out Before Buyers Do
Some sellers order their own septic inspection and water test before listing. That can give you time to address a problem on your own schedule, get repair estimates, and share results with buyers. It can also mean disclosing what you learn, as your state requires. Weigh the pros and cons in whether a pre-listing inspection is worth it.
Learning about the well and septic system before you list gives you more time and more options.
If a Problem Is Found
A failed water test or a septic issue doesn't automatically end a sale. Common paths include:
- Retesting after treatment. For some water results, a licensed well contractor may recommend disinfecting the well or adding treatment, followed by a new test.
- Repair or replacement. Septic repairs often require a permit and may need local approval. Get written estimates from licensed contractors.
- A credit or price adjustment. The buyer may prefer to handle the work after closing, if the loan program and local rules allow it.
- Escrow holdbacks. In some cases, funds are held at closing until work is completed, if the lender and local rules allow.
Which option fits depends on the problem, the contract, the buyer's loan and local rules. For how to weigh a buyer's requests, see how to respond to inspection repair requests.
Disclose What You Know
Disclosure rules vary by state. In general, sellers are expected to share known material issues, which may include past septic backups or repairs, water quality problems, low water supply or treatment equipment. If you aren't sure what your state requires, a real estate attorney can help.
Frequently Asked Questions
Do I have to pump the septic tank before selling?
Not always. It depends on local rules, the inspection method and the purchase contract. Ask an inspector how pumping should be timed before scheduling it.
Who pays for well and septic inspections?
It's often negotiated. Buyers commonly pay for their own inspections, but local rules or the contract may assign some costs to the seller.
Will a buyer with an FHA, VA or USDA loan need a water test?
They may. These programs have standards for private wells, and local health rules and the lender's requirements also apply. The buyer's licensed loan officer can confirm.
How long are well and septic results good for?
It varies. Some lenders, loan programs and local rules require results dated within a certain window before closing.
The Bottom Line
A septic system or private well doesn't have to complicate a sale, but it does add steps. Gather records early, check local rules with the health department, understand that the buyer's loan may have its own requirements, and consider testing before you list. Knowing where things stand gives you time to handle any issues before they affect closing.
This article is general information, not legal, lending or environmental advice. Well and septic requirements vary by state, county, loan program and lender, and they can change. Talk with your local health department, a licensed well or septic professional, a licensed loan officer or a real estate attorney about your specific situation. Advice4Homeownership is a publisher, not a lender.
