This Bird Has Flown
10 Quail Road just sold for $7.485 million. That is a rather appreciable discount from its original (8/18/00) asking price of $11 million and, along with other recent sales, suggests that the bloom is off the extreme high end of the market. The sales price isn’t chump change by any means, but the last time the property changed hands it did so in 1998 for $7.5 million. As we like to say in this business, “your results may vary”.
Rooms to Let . . . Fifty Cents
Rentals are also down. While I have no statistics to prove it, the general feeling among agents is that homes that once commanded, say, $4,500 per month are now going for a thousand dollars less. A couple of speculative theories: (1) large corporations no longer pay $10,000 a month to house transferred executives and this has pushed everything down; (2) interest rates have dropped so low that renters can buy a condominium instead. Whatever the cause, investors in rental housing would be wise to base their financial calculations on current, rather than historical rents.
And Up Through the Ground Came a Bubblin Crude
Many homeowners who heat with oil assume that a nice man comes by regularly with a load of warmth, pumps that warmth into . . . somewhere and that’s it; the house is heated. And that’s all they need to know, until they agree to sell their house and the potential new owner’s attorney asks about the oil tank. “The what?” It turns out, all that oil delivered over the years was being stored somewhere, often underground in an oil tank. Because the State holds property owners responsible for environmental damages caused by a leaking oil tank (and, as of 1998, requires property owners to notify the DEP when a contaminant is discovered) buyers usually insist that any underground tanks be removed and a new tank placed inside before they’ll buy a home. That’s a three thousand dollar job even if the tank has not leaked (and ten times that or even more if it has) so sellers usually balk at such demands. The tank probably has to go, but who pays?
All together now: “It depends!” That’s right, once again, there’s no clear answer. The law is silent and buyers and sellers are free to distribute the expense however they see fit. Are there three backup offers pending, at prices higher than that offered by the hopeful buyer? Then the buyer will end up holding the wrong end of the dip stick. No other offers? The house has sat vacant for six months while the transferred owner pays for two homes, one on each coast? He’ll pay. It’s a matter of bargaining power. Those readers who bought “tank insurance” from their oil company and are counting on them to pay for its removal should read their policy. It may well not cover voluntary removal.
Assuming that the question of who pays is resolved, what then? (Someone) hires a tank removal company and the tank is inspected. Soil samples are taken. No leakage? Good news! The tank gets yanked (for about $1,500) and either a new one is installed inside (another $1,500) . If the existing furnace was installed just when coal began losing its luster, the home can be converted to gas. This will probably cost between $3500-$9500, but you’ll get a new, efficient furnace and be done with oil tanks. (If you do go this route be sure to have your chimney’s lining inspected. Exhaust fumes from gas can react with old oil deposits and quickly put you on the path to total involuntary renovation).
If the tank cannot be removed without causing structural damage (buried under a terrace, for instance), companies are authorized to test the soil around it. If there is no leakage they’ll cut off the top and fill the tank with an inert substance. They can, and will, provide a certificate of abandonment which should satisfy most potential buyers. Customers of mine recently benefited from just such a situation when another buyer balked at accepting a home with a (properly) abandoned tank. As everyone else concerned: town officials, lawyers and lenders all agreed that the tank posed no problem, my buyers stepped in and got the house. Lesson: try not to be hysterical about all this.
10 Quail Road just sold for $7.485 million. That is a rather appreciable discount from its original (8/18/00) asking price of $11 million and, along with other recent sales, suggests that the bloom is off the extreme high end of the market. The sales price isn’t chump change by any means, but the last time the property changed hands it did so in 1998 for $7.5 million. As we like to say in this business, “your results may vary”.
Rooms to Let . . . Fifty Cents
Rentals are also down. While I have no statistics to prove it, the general feeling among agents is that homes that once commanded, say, $4,500 per month are now going for a thousand dollars less. A couple of speculative theories: (1) large corporations no longer pay $10,000 a month to house transferred executives and this has pushed everything down; (2) interest rates have dropped so low that renters can buy a condominium instead. Whatever the cause, investors in rental housing would be wise to base their financial calculations on current, rather than historical rents.
And Up Through the Ground Came a Bubblin Crude
Many homeowners who heat with oil assume that a nice man comes by regularly with a load of warmth, pumps that warmth into . . . somewhere and that’s it; the house is heated. And that’s all they need to know, until they agree to sell their house and the potential new owner’s attorney asks about the oil tank. “The what?” It turns out, all that oil delivered over the years was being stored somewhere, often underground in an oil tank. Because the State holds property owners responsible for environmental damages caused by a leaking oil tank (and, as of 1998, requires property owners to notify the DEP when a contaminant is discovered) buyers usually insist that any underground tanks be removed and a new tank placed inside before they’ll buy a home. That’s a three thousand dollar job even if the tank has not leaked (and ten times that or even more if it has) so sellers usually balk at such demands. The tank probably has to go, but who pays?
All together now: “It depends!” That’s right, once again, there’s no clear answer. The law is silent and buyers and sellers are free to distribute the expense however they see fit. Are there three backup offers pending, at prices higher than that offered by the hopeful buyer? Then the buyer will end up holding the wrong end of the dip stick. No other offers? The house has sat vacant for six months while the transferred owner pays for two homes, one on each coast? He’ll pay. It’s a matter of bargaining power. Those readers who bought “tank insurance” from their oil company and are counting on them to pay for its removal should read their policy. It may well not cover voluntary removal.
Assuming that the question of who pays is resolved, what then? (Someone) hires a tank removal company and the tank is inspected. Soil samples are taken. No leakage? Good news! The tank gets yanked (for about $1,500) and either a new one is installed inside (another $1,500) . If the existing furnace was installed just when coal began losing its luster, the home can be converted to gas. This will probably cost between $3500-$9500, but you’ll get a new, efficient furnace and be done with oil tanks. (If you do go this route be sure to have your chimney’s lining inspected. Exhaust fumes from gas can react with old oil deposits and quickly put you on the path to total involuntary renovation).
If the tank cannot be removed without causing structural damage (buried under a terrace, for instance), companies are authorized to test the soil around it. If there is no leakage they’ll cut off the top and fill the tank with an inert substance. They can, and will, provide a certificate of abandonment which should satisfy most potential buyers. Customers of mine recently benefited from just such a situation when another buyer balked at accepting a home with a (properly) abandoned tank. As everyone else concerned: town officials, lawyers and lenders all agreed that the tank posed no problem, my buyers stepped in and got the house. Lesson: try not to be hysterical about all this.
posted by Chris Fountain at 12:49 PM
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