Convert from fuel-oil to natural gas heat?


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Dear Real Estate Adviser,
Is it worth spending the money to convert fuel-oil heat to gas heat before putting a house up for sale?
— Karen P.

Dear Karen,
A more efficient and considerably cleaner-burning heating system will indeed help sell your home, as your seller instincts tell you. How much so depends somewhat on regional tastes and regulations. Only about 8 percent of the country still uses heating oil, according to the latest stats, so if you live in one of those dwindling numbers of places — primarily in the Northeast — the chances a buyer will tolerate fuel-oil heat are a bit better. But in most localities, homebuyers tend to get hinky about fuel-oil tanks and their black-smoke smell, and they don’t want to take on the insurance and environmental liabilities for old oil tanks.

Why some prefer gas heating

As for the switch, selling points for today’s natural-gas boilers are that they require less frequent and less expensive service compared with oil heaters, have better efficiency ratings and considerably fewer emissions. The more expensive condensers provide even better long-term savings, but they typically require new venting and have longer payback periods. A new system could put you back $3,000 to $15,000 or more, depending on the one you choose and other factors.

Chief among those are the levels of subsidies available to help you transition to a natural-gas system. In some places, assistance can be had from local or state sources in addition to more readily available federal credits. Call your local gas company or a reputable heating contractor to see what’s available and how it works. (It probably isn’t logical to buy anything but a standard boiler since you’re selling.)

Or have the buyer make the change

Another strategy is to offer the buyer a commensurate credit right off the bat. You’d eliminate all the fuss and muss with this tactic, but would also likely limit your buyer pool in the process. A seasoned local agent can help you with your strategy. If you haven’t hired an agent yet, feel free to seek advice on the subject during your interviews (with at least three). If you do opt to sell with the existing system, be prepared to provide the potential buyer a rough cost equation for replacement, rolling in available subsidies.

Should the tank stay or go?

If you choose to replace it, be sure to ask contractors if the price includes tank removal. That can really fatten up the bill, especially if the old tank is underground. Some sellers switch out systems but just leave the old tank behind. However, a buried oil tank can really complicate the process of buying because insurers and mortgage lenders often stipulate there be “no underground storage tanks.” Tank removal is also typically subject to environmental agency oversight and soil testing. Some insurers will coordinate all the necessary permits and inspections to grease, if you will, the process.

Odds are that the oily old system will have to go soon either way. Fuel-oil heat is on the endangered list in much of the country and rightfully so. Only 1 percent of buildings in New York City, for example, burn heating oil but are responsible for at least 85 percent of soot pollution caused by buildings there, making fuel oil a target of recently strengthened environmental laws.

Good luck in your decision and your sale.

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