Yes, you can sell a home with a failed septic system – unless local law prohibits it. In some states, it’s illegal to sell your home if the system isn’t up to code (which includes a failed system). If you’re not sure about your local laws on the subject, a great place to start your search is with your state’s health department. Another good resource is your real estate agent, who should be familiar with the laws in your area or know where to get the answers you need. If you live in a state or municipality that doesn’t allow you to sell a home without a working septic system, then you will have to repair or replace it before the sale. Even if you can sell a home without a functioning septic system, expect a diminished buyer pool and prepare to lower your price. Read on for some suggestions and remember, you can always ask your agent for advice. First, let’s cover what a septic system is and how it operates so you’ll understand its importance. A septic system safely treats gray water and wastewater that comes from your home. Common in rural areas where homes aren’t connected to a city sewer system, septic systems are an established method of waste management. One main pipe carries water from your house to a buried, water-tight septic tank typically made of concrete, fiberglass, or polyethylene, where it is held long enough to allow the solids to settle to the bottom. There, they form sludge, letting the oil and grease float to the top as scum. The effluent (liquid wastewater) is siphoned off to a drainfield, a shallow, covered area excavated in unsaturated soil. Pretreated wastewater is then discharged through piping onto porous surfaces (usually rock) that allow wastewater to filter through the soil. As the wastewater “percolates” through the soil, it removes coliform bacteria, viruses, and nutrients, ultimately discharging to groundwater. If the drainfield is overloaded or blocked, it can flood and cause sewage to rise to the surface, or it can create backups in sinks and toilets. That’s one sign of septic system failure. Others include: If this is the situation you’re facing when you’re ready to put your home on the market, you’ll need to take some steps to deal with it. First things first: Get your septic system inspected by a certified inspector — a private contractor, someone from the health department, or a wastewater professional. Average cost of a professional inspection ranges from $260 to $420. The National Association of Certified Home Inspectors recommends annual inspections, but it’s particularly important when you’re considering putting your home on the market. In fact, if you have an offer on your home, an inspection might be compulsory before closing. For example, some mortgage companies require a septic inspection. Other times, state or local governments call for them. Iowa is one state that requires a septic inspection for the deed transfer. Your options depend on what the inspection reveals. Many common problems are fixable. Many common issues can be (fairly) easily repaired. Typical issues include: Homeowners should hire a professional to inspect their septic system every one to three years and pump it every three to five years (or as needed), according to the EPA. How to fix it: If you haven’t pumped it in a long time and a problem has resulted, hire a professional to pump and thoroughly clean your septic system to reverse the failure. The cost to clean a system varies based on tank size, but it will generally cost between $275 and $580. If a deep cleaning doesn’t solve the problem, it may require replacing the baffle – the component that prevents scum buildup in the tank. This can cost $300 to $900. However, it may not work if the system has been grossly neglected or overused. Septic system size is based on the number of bedrooms a home has: a four-bedroom home requires a 1,200-gallon tank, for example. If your water usage exceeds the system’s capacity, the system can’t handle it. This can result in wastewater backing up into your pipes, drains, the home itself, or the surrounding ground. How to fix it: Pump and clean the system, as recommended above. However, if the septic system is too small for your home, you might have to consider a full replacement (more on that below) to increase its capacity. Tree roots seeking moisture and nutrients can damage your septic system by encroaching into it as they grow. Heavy paving materials on top of the drainfield or other elements of the system can compact the soil, preventing proper discharge or damaging pipes. This is why you shouldn’t pave, drive, or park over septic system components. To remove the roots can cost between $1,000 and $5,000. Costs can escalate if the roots have damaged the tank to the point of needing repair. How to fix it: Depending on what component is damaged, there’s a chance of repair. Septic line repairs generally cost around $1,520. Leach field (drainfield) repairs can run from $2,000 to $15,000. If a septic tank was improperly installed, it’s going to fail at some point. If the drainfield is installed where the land slopes excessively, a high water table exists, or the soil isn’t permeable, it can result in hydraulic failures and even contamination of water sources. If a septic tank is the wrong size, not watertight, not level, or not at the correct depth, it could cause runoff issues. How to fix it: If the septic tank is still in good shape, you may be able to simply replace the drainfield by digging up the septic system and placing it in a new, uncontaminated field on your property. This can cost $3,000 to $8,000, depending on the size of your system and its location. A repair is often preferable to replacement in terms of price and the scope of work required. Installing a whole new system can cost $8,000 to $25,000, while repairs typically top out around $10,000 … unless you need a new leach field. Sometimes, however, no amount of repair will fix a problem, leaving replacement as the only alternative. Because the cost to replace a septic tank and drainfield is high and the process invasive, it is therefore often a homeowner’s last resort. Before replacing the whole system, make sure it’s necessary. Signs of a failed septic system may include, but aren’t limited to: A failed septic system can pose health hazards, and standing water in your home and on your property can cause additional damage. The cost to replace a septic tank will vary based on its size, as well as the cost of permitting in your area. You can expect to pay, on average: Source: HomeAdvisor Instead of replacing the septic system, you might be able to hook your home up to a sewer line that didn’t exist when the house was built. The process requires decommissioning your septic tank and installing new plumbing lines on your property. You may also need to pay permitting and connection fees charged by your city or municipality. Connecting your home to the sewer can cost $529 to $2,265, and the fees associated with the hookup from the city can cost $500 to $20,000, depending on where you live. Connecting to sewer may be cost-prohibitive, but Joe Reichert, a top real estate agent in Martinez, California, has worked with homeowners who tried to tackle the expense by uniting with their neighbors. Ultimately, their plan had too many moving pieces, so the sellers ended up seeking an alternative. “The cost of installing a sewer line down the street would’ve been astronomical,” recalls Reichert, who’s sold 69% more single-family homes than the average agent in his area. “They could’ve gotten everybody on the block to go in on it or take out a bond that they paid off over time. But, it’s really complicated.” Some options seem too overwhelming … and expensive. There may be situations when the seller chooses not to replace a failed system. If you don’t have the cash on hand to replace the septic system, investigate grants, loans, and other financing programs offered by the U.S. Department of Agriculture (USDA) and other federal and state agencies. For sellers who do not have the desire or ability to repair or replace the septic system, and especially if a full replacement is required and the estimate is a budget-buster, the best solution might be to sell the home “as is.” Even when selling your home “as is,” you still have some options. You can list your home with a Realtor without doing any major repairs. Keep in mind that selling a home with a failed septic system is going to reduce your buyer pool … and your home’s selling price. It can also mean more days on market (DOM) because it takes time to find a buyer willing to take on your home’s problems. You also need to be aware that, by law, you must notify buyers of the issue. If you choose to go this route, it’s wise to collaborate with an experienced real estate agent who can guide you, screen buyers, and negotiate well. For sellers who don’t have the time, budget, or ability to repair or replace their septic system, selling to investors and cash buyers offers an alternative that gets around the challenge of getting a lender to approve a mortgage for a home in need of significant work. Cash buyers – including house-buying companies, flippers, and investors – tend to overlook a lot of issues because they already have plans to renovate. Eliminating the need for an appraisal can also speed up closing time. If you want to skip showings and repairs, you can see a cash sale option through HomeLight’s Simple Sale. Answer a few questions on this free platform about your home, its location and condition, and your timeline. In most cases, you’ll receive a no-obligation cash offer in as little as 10 days, all without financing contingencies or agent commissions. There are pros and cons to consider for each option. Here’s a short list: Pros of selling “as is” Cons of selling “as is” Even if you can legally sell your house “as is,” there are some other things you need to keep in mind. Selling your house with a failed septic system comes at a price. You’ll probably need to offer buyers a deep discount or a credit to make it appealing. Reichert recommends “knowing the cost [of repair or replacement] upfront. That way the buyer knows what they’re getting into. They’re less likely to be scared off by unknowns.” Having estimates in hand before the house hits the market means your buyer doesn’t have to get quotes. It also demonstrates your honesty: You aren’t hiding anything and you’ve done the due diligence for the buyer. A complete estimate for buyers should include not only the cost of replacing the system but also the guarantee that there’s enough room on the property to build another system, since it will need to be installed in a different part of the property than the previous tank. Nearly 50% of millennial homebuyers are looking for turnkey properties. Many buyers won’t want to tackle the inconvenience and hassle of repairing/replacing a failed septic system, even if the property is heavily discounted. In some markets, offering a discount might not be enough. You don’t have to fix the system yourself, but be prepared to cover the cost of the replacement of the septic tank as an allowance against the sales price of the home. Because many lenders won’t approve a loan for a house without a working septic system, be prepared to find alternatives to conventional sales, such as finding a cash buyer. If the buyer is ready to close, but the septic replacement isn’t complete (weather delays are common), their lender might require an escrow holdback from the seller. That means the seller puts enough money into escrow to replace the septic system for the buyer. Some lenders will require a minimum of 1.5 times the estimated cost of repair into escrow to cover overruns. If a septic system is too small, it likely won’t pass inspection. Different state and county codes set minimum sizes for septic tanks based on the number of bedrooms in a home. If the seller has added a bedroom, that could render the septic system too small. In Indiana, as in many states, there is no “grandfather” clause for septic systems. One option to become compliant may be to replace or add another tank to your septic system. You’ll also need to update the listing of your home to reflect the current number of bedrooms, which will redirect attention to an insufficient septic system. Most states require you to disclose if the home has a septic system. You might be asked to disclose the date of last inspection, its condition, and its most recent date of pumping. If you don’t know those details, it’s wise to have an evaluation conducted. States that don’t have specific septic disclosure forms may rely on what’s known as “Caveat Emptor” (let the buyer beware). This rule states that it’s the buyer’s responsibility to determine if there are any problems with the property. Caveat Emptor allows the buyer to ask any questions about the home’s condition and anything that jeopardizes the health and safety of the buyer. Declining to disclose a failed septic system on your property leaves you liable to a lawsuit from the buyer. If it’s been a while since you had your septic system inspected, or if you know it’s failing, it’s time to call in the experts. Get a certified inspector to determine if there’s an issue – and if it can be repaired or if the entire system must be replaced. Consult with an experienced agent about how to sell your home with a major septic issue – whether you should fix any issues or sell “as is.” An agent in your area familiar with local regulations about septic system standards can help you make the best decisions. You can find a top agent with the help of HomeLight’s Agent Match, a free, data-driven platform that analyzes millions of transactions and thousands of reviews to match you with the best local agents. This story was originally written by HomeLight contributing author Emma Diehl and published on March 31, 2020. Some of the original content has been retained for this updated post.What is a septic system and how does it work?
How to sell a home with a failed septic system
Option 1: Repair the septic system
You’ve neglected to maintain the system
Too much water is rushing through your septic system at once
Tree roots or other outdoor landscaping has damaged the system
Your septic tank was never installed correctly
Option 2: Replace the septic system
What are the signs of septic system failure?
Get an estimate for replacement
Consult with neighbors
Option 3: Sell your home ‘as is’
Sell “as is” on the open market with a Realtor
Sell “as is” for cash to an iBuyer, investor, or cash offer platform
Other considerations when selling your home ‘as is’
Price your house to reflect the failed system
Expect buyer interest to be limited
Offer upfront replacement costs
Navigate an escrow holdback if the lender requires one
What if my septic system is too small or just OK?
Get expert advice on how a failing septic system will impact selling your home
