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Who Pays for Radon Mitigation – Buyer or Seller?

Buying or selling a home can often be a lengthy process with many hurdles, including the inspection. When radon comes into play, it can be hard to know what to do.  In this post, we try to answer at least one of your questions – who pays for radon mitigation – home buyers or home sellers?

The shortest answer: there are options! Usually, the cost of mitigation falls on the home seller. However, there are a few ways that this can play out. Stay with us, we’ll unpack those options a little further down the page.

Whichever side of the real estate transaction you are on, your hopes are high for everything to go smoothly through the final closing. Maybe you are buying a home and have finally put in an offer on the one you have been dreaming about. Alternatively, maybe you are selling your home and are eager to start seeing those offers come in.

The inspection report can come back with costly fixes and unexpected expenses. One critical measurement that should be taken during the home inspection process is testing for radon.

Chances are if you have ever heard of radon, it is because it came up during the process of buying or selling your home. If you have never heard of radon before, you are not alone. Most people do not know what it is or why it is harmful.

First of all, is radon actually something to be concerned about?

Radon is not something you want in your home, particularly at elevated levels. It is naturally occurring, meaning it is impossible to get rid of completely, however, the lower your radon levels are, the better.
Why? Radon is a radioactive cancer-causing gas and can be found at elevated levels in any home, old or new. It can easily go undetected because you can’t see, smell, or taste it. Also, radon is naturally occurring and comes from the breakdown of uranium in the ground.
Furthermore, the gas can then seep into your home through cracks in the foundation or pipes. If radon is breathed in, it can cause damage to your lungs, resulting in lung cancer. 
How-Radon-Enters-You-Home

Additionally, radon is responsible for the deaths of more than 21,000 Americans every year. It is also the leading cause of lung cancer among non-smokers, second overall only to smoking. It is important to be aware of the radon risk during a real estate transaction. Learn more about radon and the symptoms of radon gas poisoning.

Radon in a typical real estate transaction:

  1. Home buyer submits an offer.
  2. Home seller accepts the offer. *
  3. Home buyer orders a home inspection.
  4. The contract is contingent upon inspection.
  5. A radon test should be conducted during the inspection period at the request of the buyer.
  6. Radon test results are provided.
  7. The EPA recommends mitigation at 4.0 pCi/L or more.
  8. Depending on the radon test results, the home buyer may request for the home seller to provide a mitigation system.
* In some states, the seller is required to disclose if they have tested for radon, the results of any testing that has been conducted, and if a mitigation system is installed on the home.

The risks of buying or selling a home with high radon levels

When Buying:

  • The combination of high radon levels and no mitigation system puts you and your family at risk of radon exposure.
  • A mitigation system presents an unwanted (but necessary) additional expense to be considered when purchasing the home (average cost of $1,200 to $2,500, depending on the home).
  • If a mitigation system is installed or was previously installed, ensuring the system continues operating correctly long-term to keep your radon levels in check.

When Selling:

  • Not accommodating a radon mitigation system can risk the sale contract falling through.
  • A mitigation system presents an unwanted additional expense (average cost of $1,200 to $2,500, depending on the home).
  • Liability of installing the cheapest system before closing may not protect the buyers long-term if a faulty system is installed.

Should you buy a home with radon?

When buying a home with high radon levels, you may have concerns that you shouldn’t continue with the closing process. Don’t fear, a properly installed radon mitigation system is an effective solution for keeping your family safe from radon exposure.

Radon is dangerous when it builds up and is trapped inside the home. The solution is to install a radon mitigation system. A mitigation system consists of an active fan and vent pipe system that vacuums toxic air from below your home and discharges it out to above your roofline, out of harm’s way.

Also, if the home you are buying already has a mitigation system installed, it is a good idea to conduct a radon test and system maintenance inspection to ensure that the system is still working to keep the radon levels down in the home.

If the home you are buying does not have a radon mitigation system installed, and the radon test comes back elevated (the EPA recommends mitigation at 4.0 pCi/L or more), you will want to have a system installed to reduce your risk of exposure.

The sellers of the home may have already tested for radon in the past. Depending on the state you live in, the home sellers could be legally obligated to disclose the radon levels of the home. However, radon levels can fluctuate due to weather, seasonal changes, or home renovations, so it is still advised to perform another radon test during your home inspection. In fact, homes with a radon mitigation system should be tested every two years to confirm radon concentrations remain below the action level.

For real estate transactions, the radon test is conducted during the inspection period. Most home inspectors offer a professional radon test as an additional service. The radon test expense is most often covered by the home buyer along with the inspection.

In need of a radon test?

Our team is certified and licensed to provide professional radon testing, as well, if your home inspector does not provide this service or if you’re looking for a second opinion, our trusted professionals are here to help!

Who pays for the radon mitigation system, home buyer or seller?

A mitigation system is probably an expense you were not expecting to pay with the purchase of your new home. However, radon mitigation systems can be treated like any repair in a real estate transaction. Additionally, installing a radon mitigation system (if the radon test results come back elevated) is a critical fix for the health of individuals who will be living in the home.

The options for payment and installation of a radon mitigation system during a real estate transaction:

1. Buyer pays for the mitigation system after the real estate transaction is completed.

Buyer's Benefit Seller's benefit Buyer's Risk Seller's risk
Buyer's Benefit Has full control over who installs the system and the quality of system they would be getting
Seller's benefit No additional cost or liability
Buyer's Risk You take on full financial responsibility for the system installation and annual maintenance
Seller's risk If the buyer does not want to go this route, you could risk your closing transaction falling through

2. Seller chooses a company and pays for mitigation system installation.

Buyer's Benefit Seller's benefit Buyer's Risk Seller's risk
Buyer's Benefit Seller pays for the system in full and the system is installed before closing
Seller's benefit You have control over how much you want to spend on the system and you keep the buyer engaged in the sale
Buyer's Risk No control over which company installs the mitigation system or the quality of the system you would be getting
Seller's risk Choosing a mitigation contractor solely on a lowest cost basis could mean you’re getting an ineffective system installed, putting the buyers at risk of exposure. You could be liable for the system you chose to have put in.

3. Buyer chooses a company and seller pays for the mitigation system installation.

Buyer's Benefit Seller's benefit Buyer's Risk Seller's risk
Buyer's Benefit Seller pays for the system in full, before your closing date, and works with a company you trust to install the mitigation system
Seller's benefit Less liability as you are working with the company of the buyer’s choice
Buyer's Risk The seller could decline this request and you could risk the contract falling through or having to pay for the system yourself after closing
Seller's risk You would take on full financial obligation to install the system and the cost would be up to the buyer

4. Seller provides an allowance or credit for the mitigation system installation.

Buyer's Benefit Seller's benefit Buyer's Risk Seller's risk
Buyer's Benefit You are able to choose to work with the best licensed and certified team for your system installation and have a majority of the cost, if not all, covered by the home seller.
Seller's benefit Your cost is capped at whatever amount you choose to provide and the transaction can keep moving forward, as the buyer would have the mitigation system installed after closing
Buyer's Risk If the installation costs more than the amount provided by the seller, you would need to cover the difference
Seller's risk An additional closing cost

Importantly, the seller is not legally obligated to pay for the radon mitigation system. However, a buyer can certainly request the seller cover the cost of any home repair, including a radon mitigation system. While the buyer or the seller could pay for the mitigation system, we suggest a seller allowance or credit. In fact, approximately 83% of home sellers do provide credit for a variety of repairs after seeing the inspection report.

Poorly installed mitigation systems:

This mitigation vent discharges radon directly at face level. The vent is also next to a window and blowing toward a child’s play area – standards state the point of discharge is required to vent a minimum of 12-inches above the eve of the building so radon can dilute safely in outdoor air.

Who pays for radon mitigation

The unintended consequence of installing a radon fan in the basement is potentially exposing the occupants of the home to high levels of radioactive radon. The radon fan must be installed outside of the conditioned building envelope to prevent the potential for re-entrainment.

Here we see the discharge point of a mitigation system facing downward. To meet the minimum requirements, the point of discharge needs to extend above the eve of the building to prevent potential re-entrainment.

This mitigation vent discharges radon directly below a window, possibly directing the radon back into the home. Also, the electrical is being run through an extension cord, which should not be used on any mitigation system.

How do allowances work in a real estate transaction?

It is very common for a buyer and seller to negotiate an allowance for home repairs based on the inspection report. Before the time of closing, the amount of the allowance is negotiated between the buyer and seller through the real estate agent. Then, an addendum is written saying the buyer and seller agree the seller will pay a particular dollar amount toward the buyer’s closing costs. It has nothing to do with the cost of the house or your mortgage, just the closing costs. Then, the amount is given at the time of closing in the form of a check or money order.

Our Advice:

When considering who should pay for the radon mitigation system in your real estate transaction, our advice is for the buyer and seller to negotiate a fair allowance be made for the mitigation system. In sum, we have seen time and time again how this type of allowance protects the interests of all parties and keeps the transactions moving forward toward closing.

To the Seller:

Unfortunately, even though there are standards for how mitigation systems should be installed, there are companies out there that do not install good, reliable, mitigation systems. If you are looking for the lowest cost system, you may just be getting what you pay for.

As a result, choosing to work with mitigation contractors who are not licensed and certified could come back as a liability for the seller. Protecting the occupants of a home from radioactive radon gas is a large responsibility. Our advice is to avoid the liability of choosing someone else’s radon mitigation system and provide an allowance at closing instead.

Meanwhile, installing a mitigation system before closing also comes with the hassle of retrieving quotes from multiple radon contractors, researching their qualifications, and comparing the best options. Not to mention coordinating the installation process is a task itself. This can be tedious and can cause delays in the closing transaction.

In conclusion, if you, the seller, provide an allowance for the mitigation, you rid yourself of the responsibility of installing an effective system on behalf of the buyer. Avoid the liability, cap your cost at the average amount, and keep your closing date by providing an allowance for the radon mitigation system.

To the Buyer:

First, the safety of you and your family against radon exposure should be the top priority. It is human nature for the home seller to want to save money on closing costs. By asking for an allowance, you keep yourself in control of deciding who installs the radon mitigation system in your future home.

When you receive your allowance, or credit, at closing, be sure to find a radon contractor that specializes in radon, is certified to install the system, and works with licensed electricians. This is important for ensuring your family is being protected.

Faulty systems can, not only not reduce the radon levels in the home, they can also increase the levels in some scenarios. Building science is highly complex and pressurized systems should be installed by the experts.

In the process of buying your home, if a radon test result comes back at a level that you are unsatisfied with (again, the EPA recommends mitigation at 4.0 pCi/L or higher), request an allowance for a negotiated amount to be provided by the seller at closing. This way, you and your family can choose the right company to install your system.

To the Real Estate Agents:

If you’ve made it this far into the post, we know you are dedicated to making your clients happy throughout the entire process of the real estate transaction. Also, we know you’re looking forward to closing day, too, because the closing day is payday!

When it comes to radon in the real estate transaction, our advice is to encourage your home buyers to ask for an allowance for mitigation and to encourage your home sellers to provide or offer one in the case that a mitigation system is requested.

Subsequently, this solution highly benefits both home sellers and home buyers alike and keeps the transaction moving forward and on schedule.

Seller Allowance Radon Mitigation

Our trusted professionals are here for your peace of mind.

Regardless of what party you represent in a real estate transaction, we are here for your radon testing and/or mitigation needs. Providing expert service from trusted professionals for our clients’ peace of mind protection is what we are in business to do.

Give us a call or request a quote to get started on your residential radon testing or mitigation project today.