The USDA rural development has a 504 Repair Program go to http://www.rurdev.usda.gov. There is State & Federaly funded loans ranging from 1.5 to 2.5% interest with a 5 year deferred payment. There are also Grants available for you that you do not have to pay back. You can get part loan and part grant to pay for the septic system . Find the county website where you live and look at the department of ecology for information about septic system loans & grants as well as the usda!
ENJOY having your new septic system installed! The Home Equity Loan is not a good idea the interest is higher than the state & federal loan programs plus these loans are deferred payments for 5 years. Grants are great too because you do not have to repay them at all!

I know that some septic systems have been installed a AFTER closing are done with the funds for the septic held in escrow then dispersed to the contractor after the project has been completed. This depends more on the buyers lender and/or attorney AND if the buyer agrees. It can be done,
but as a professional, I would advise my sellers to have the septic installed prior to the sale or better yet, prior to placing on the market. This will eliminate the buyers driving by multiple times to "inspect" the job. The buyers sometimes get nervous about where the tank is installed, how it's installed among all of their other concerns, this could be a big one.

Hello Kathy- The easiest way out of this is a home equity loan- if you have decent equity left in your home. Max LTV is usually around 89% of current value. Most HE loans can close in 7-10 days.
If I can help you any further, please contact me. Good luck,

Ken L.

In some cases you may be able to pay with proceeds from closing. It all depends on the company's willingness to take a chance on it not closing.....if some unforseen problem arises you are still liable if you don't close

Hi,

This is a dilemma that most sellers in our area face when trying to sell. The agent you have hired to sell your home should have a relationship with a septic installer who will wait until the property closes to get paid. Most of the septic installers have their own engineers so it can be done as a package deal. You are not alone! Make sure to rely on your agent as they know people who can help you.

Actually you can do the same thing in Massachusetts. As long as you have equity left in your house you can pay at the closing. The issue is finding the company that will wait for you to sell your house.
You could also have your Realtor disclose failed title 5 in the MLS and state something like” seller to pay $5000 for the septic at the closing”. However in this competitive market it might reduce your buyer pool, and your house might take longer to sell. You have to price it really competitively and still expect price negotiations.
Have you considered home equity line or a loan?

I know if California it is common for the septic company to be paid at the close of escrow from the seller's escrow or settlement proceeds. If the money is not available through proceeds then you would have to make other arrangements that are acceptable to all parties concerned including the buyer's lender. But don't allow the septic company to charge you too much for a new system. Be sure to have other bids and/or your realtor review the bids as you can be taken to the cleaners on expenses such as these if you don't know what to expect. Good luck!

Hi Kathy,

You’re not alone on this one. Most sellers don’t have the upfront money to do this repair. Some installers will work with you and make arrangements to get paid with the proceeds of your sale. Some upfront costs that you will most likely encounter would be the fees to the town for the perc test, as well as the engineering costs to the company who draws the plans. You may want to check with the engineer to see if they will take a deferred payment too.

~M