Hydrostatic Tests & Castiron Plumbing

Jun 05, 2022

Hydrostatic tests are a pretty sticky subject in general. If a property was built <1970 and hasn't had a complete plumbing replacement (not just the sewer line to the yard) then there's a 90% chance that it will fail. If built <1970, always ask if the pipes are cast iron or PVC. If castiron, there's a 90% chance that it will fail.

The problem w/ hydrostatic tests is that there's a misperception that they damage the pipes. If you google the test, it sounds super scary: "The pipes will be pressurized to test the system", or something to that effect. A lot of sellers interpret this as "they'll load up the pipes w/ hundreds or thousands of pounds of pressure and this can damage my pipes." The new addendum specifically calls out damage caused by the test, which is just absurd and will further the misperception that the test can damage the pipes. In reality, they fill up a bathtub, which is the "pressurization" and if the pipes leak, the bathtub water goes down. If the pipes can't handle the load of a bathtub, they're already failing.

That said, you're not going to educate someone who isn't your client (if you're representing the buyer, you're not going to educate the seller.) So, we have to deal with this common misperception, and you absolutely don't want an emotional seller, who just learned that they have a $30k+ repair under their house, to start blaming you & your buyer for breaking their pipes. We recommend the following:

If representing the buyer:
Make sure and educate your buyer about castiron plumbing on any house built <1970 well in advance of going under contract on any property.

• Do not broadcast to the listing agent that you're concerned about the plumbing prior to getting an offer accepted. You will lose contracts if you do this.
• Allow the inspector to call out the plumbing. If it's castiron & you're using Randy, he will always (rightfully) write it up.
• Notify the listing agent that the inspector is concerned about the plumbing and you need to investigate further.
• Explain to your client the pros/cons of a static test - it's a 100% test, but it comes with serious risk that the seller could accuse you of damaging the plumbing.
• Recommend the alternative of running a camera through the pipes to check for cracks.
• If the plumber finds cracks, negotiate as though that's a 100% test. If the seller doubts the test, invite them to bring in their own plumber, who will recommend that they get a hydrostatic test. Allow the seller to perform the hydrostatic test if they feel they should.

Thanks for your patience on this. Per our text conversation yesterday, the plumbing under the house is in bad shape. It's cracked and leaking throughout. It's the same material as the sewer line that was replaced, so it makes sense that it would also be failing.

If you would like to see the pics and video of the broken plumbing, please let me know. I don't proactively send them unless an agent/seller would like them.

The buyer didn't go into this expecting a perfect house. The house has been well cared for, but there are lots of deficiencies that he's understandably taking on. This repair bid came in at $22,500, and Matt is asking for a 50% credit of that, which I think is reasonable. A buyer shouldn't expect a new system, but a buyer also shouldn't expect a failing system.

Some sellers have a hard time understanding the extent of repair that goes into a plumbing system. This property was built with castiron plumbing, that has now been in the ground long enough that it's rusting through and there are now holes in the pipes, so sewage is leaking into the soil, and the pipes will collapse soon. When they're pulled out of the ground, the pipes will look something like the attached image. The plumber will excavate under the house (similar to foundation repair) and replace the castiron pipes w/ pvc. It's very labor intensive, which is why it's so expensive. On this property, there is 90' of plumbing that needs to be replaced.

I do think the $22,500 bid sounds high. If the seller would like to extend the option period a couple of days, we could get more bids. Ultimately, the buyer would like half of it covered.

If you can please confirm receipt and let us know when we can expect a response, I would really appreciate it.

• Remain blissfully ignorant of the plumbing and wait for a buyer to bring it up. Remember, we just know that it's a likely problem, we don't have any knowledge that it's actually a problem - we're speculating based on the home's age. It's up to the buyer/BA to do their due diligence.
• If the buyer brings it up, recommend to the seller that they do NOT allow a hydrostatic test b/c it could potentially damage their plumbing system. (They will find this online, and it's now in the addendum.) You can talk to them about the reality of the situation if you'd like, but don't advise them to allow a hydrostatic test, or it will eventually bite you.
• There's nothing that specifically excludes a buyer from running a camera. While I haven't run this past an attorney, it's my opinion that the contract specifically allows them to perform a camera test w/o permission. Regardless, running a camera is the safe alternative.
• If the camera test comes back and the pipes are in bad shape, you have to explain the pros/cons of negotiating. If they want to keep the deal together, they negotiate. I've found that splitting the cost 50/50 (and giving $0 for any other repairs) usually keeps the deal together. This is very expensive, even at 50%. The real decision is if they want to just let the current deal die and roll the dice w/ the next buyers.