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Radon and Real Estate Transactions

As a home buyer, an excellRadon dringt ins Haus ein 01 300x246 Radon and Real Estate Transactionsent reason to have a home tested prior to purchase is that most often the seller will pay for the radon mitigation system to be installed if the test results show high radon The EPA has set 4.0 pCi/L as the action level for radon. They recommend that if a radon test comes back at 4.0 pCi/L or higher on the first level living area of a home that action is taken to reduce the radon to a level below 4>0 pCi/L. So when the radon test results are high (above 3.9 pCi/L), then comes the following question:

Q: In a Real Estate sale when the home tests high for radon who pays to fix the problem… the buyer or the seller?

This is not always a simple clear cut answer. The simple answer is “It depends”. If a seller is motivated or is simply happy with the price he or she is getting for the house or if the seller likes the buyer or many other psychological factors, then the seller typically pays. This is most often be the case in central New York where I live and also in many other areas too.

Unless spelled out in the purchase contract, the seller is under no obligation to pay for the radon mitigation system. If the buyer is getting a “steal” in the eyes of the seller or the buyer has been difficult to work with or other factors, the seller may refuse to pay. Sometime the seller just cannot afford to have it fixed. Sometimes both buyer and seller split the cost. Sometimes the seller will offer a credit due at the closing to cover all or part of the cost of a radon mitigation system.

More often than not, the seller pays for the system. One of the reasons behind this is that if the seller refuses to pay for a radon mitigation system, they now know that the house has high radon, with a paper trail showing so; If the buyer backs out of the deal, the seller is now legally required to amend or change their “Seller’s Disclosure Statement” to say that a high level of radon does exist in their home (most often this section had previously read “unknown”).

If they do not update the sellers disclosure they could be found liable for fraud. This updated disclosure statement will become a strong deterrent to selling the home, especially when people find out the seller is unwilling to address

The national average cost for a radon mitigation system is $1200 and has been since the mid 90’s. Usually the seller is willing to pay this cost in order to allow the closing to proceed.

Radon Negotiation Tips For The Buyer

As a Home Inspector and a  Radon Mitigation Contractor I would recommend a buyer to consider the following points in re-negotiating after discovering high radon:

  • Even if the test results come back a little below 4.0 pCi/L, with results of 3.9 or 3.8 pCi/L, you can still ask the seller to install a system, especially if the test was done during warm weather, when the house is closed up and the heat on, are conditions that usually result in higher radon levels.
  • Ask the seller to allow you to choose the radon mitigation contractor. Unfortunately more than a few radon mitigation contractors specialize in super cheap radon systems, using sub standard materials and workmanship, leaving out important safety features and any warranty is questionable.
  • Ask for permission to confirm any post radon mitigation testing with your own test or test provider. Again unfortunately some radon contractor and home sellers cheat on the radon test to make sure it passes.
  • You could ask for an estimate to be made for a radon mitigation system installation by a contractor of your choosing, and then ask for a credit to be given you at closing for the cost of the system. This way you have control over how the system is installed and the quality and reputation of the contractor.
  • Alternatively you could ask for the system to be installed prior to closing, by a contractor of your choosing.
  • It’s always a good idea for proof that the radon level has been sufficiently lowered, that the post mitigation radon test be conducted by a third party to help reduce the possibility for conflict of interest.
  • Be aware that if you accept a credit for the system to be installed after you move into the house, sometimes the job turns out to be more difficult than anticipated and the could be additional cost involved. Read any radon mitigation proposal carefully.

Radon Negotiation Tips For The Seller

  • Do your own radon test prior to putting you house up for sale. If the radon test comes back high (above 3.0 pCi/L) you can install the radon mitigation system and it actually becomes a selling feature benefit.
  • Or if your prelisting radon test is high, attach a copy of the test results to your disclosure statement, this allows buyers to know about the radon level prior to making a purchase offer. You could also inform them, the selling price of the house has been adjusted for the cost of a radon mitigation system, you could even include a written proposal for a system to be installed, normally $1200 or less, to give them an idea of the cost.
  • Get an estimate or two from reputable radon contractors, forward them to the buyer and offer to give a credit for the amount of the mitigation system. This way if your house turns out to be difficult to mitigate you do not have to pay additional costs, and you don’t have to be concerned about any further testing.
  • You can offer to pay the amount for the least expensive system, and if the buyer want upgrades he can chip in the additional cost. This way the buyer gets what he wants and is not stuck with a cheap system, but you don’t have to pay the extra cost.
  • If you think your house may be expensive to mitigate or if you have multiple foundation areas, dirt or gravel floors, extra large home, clay soil, etc, you could just offer to give a credit of $1200 which is the EPA states is the average cost of a radon system. Some difficult job could cost $2500 plus. I heard of a local job a few years ago that cost over $5000 and the radon was still not below 4.0 pCo/L.
  • If you are strapped for cash you can always offer to pay for half the cost of a system. Many buyers are happy with this, it is better than nothing.
  • You are under no obligation to pay for or install a system, especially if you are in a seller’s market or have other offers on the house or are not in a hurry to sell. You could simply say the house is priced fair, if you want a system you can install one after you purchase the house.
  • If the radon test was done in a basement, that is not a living area of the home (not heated, not suitable for a finished room) and the radon level was not too much above 4.o pCi/L. You could have your own test done on the first floor of living area and it’s likely the radon level will be about half or less of what the radon level was in the basement. In almost every case the radon is lower on the first floor than what it is in the basement. This is in line with the EPA testing recommendations and action level guidelines.

 

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