Radon Testing. What’s The Intent of The Contingency?

Radon is a health hazard with a simple solution. (EPA.Gov)

It’s safe to say 100% of the radon tests set in homes in Wisconsin will record a positive radon level. It’s also safe to say, 100% of the radon tests conducted as a contingency to a residential real estate transaction will test positive for radon. There is no dispute that radon is a contributing factor to lung cancer. There is no dispute that protecting yourself from exposure to radon gas is the smart, prudent, and healthy choice. No one should minimize the fact that scientific studies prove radon is a health risk.

With that said, I believe 100% of homes should have an effective radon mitigation system installed at the time of construction. Existing homes can be, and are routinely, retrofitted with mitigation systems. The cost of the mitigation system is inconsequential considering the risk and relative to the cost of the home. According the the EPA, even atypical high levels can be reduced to acceptable levels.

Radon testing contingencies have become common in Wisconsin real estate transactions. In 1992 when mitigation companies came into the market a mitigation system of PVC pipe, a small motor driven fan, an electrical outlet, silicone calking of hairline cracks, and some labor to drill a hole into the basement concrete floor carried a cost of over three thousand dollars. Today, we have an abundance of qualified mitigation installers using essentially the same products (without the silicone caulk), and including a follow up test showing the radon level is below the EPA action level for a cost of under One thousand dollars.

The $150 cost of the initial test to tell you you have radon gas is 10% of the probable cost to cure. That in itself is enough to consider saving the $150 and just go to mitigation. But I think there is something more important to think about; the cost of doing nothing. A two day test will give you an average hourly radon level for 48 consecutive hours. Accepting a low radon level reading as an indicator of radon levels over the course of 12 months, four seasons, and a variety of atmospheric pressure situations is a gamble not worth taking.

To be clear, I am not saying the 48 hour test showing a radon level above the EPA action level is not enough information to decide the radon level is unsafe. In fact, I’m saying the opposite. A safe approach is to assume the level is going to be high enough to be a health risk, save the $150 test cost, hire a professional to install a mitigation system to your standards, and have the peace of mind to know your radon level is below the EPA action level, and the system is guaranteed by the installer.

The new Wisconsin WB-11 Residential Offer to Purchase includes a radon testing contingency. Contingencies included in the Offer document quickly become “standard” inclusions. Previously the contingency was included in addenda created by real estate firms and if the addenda was not included in the Offer, it was likely the testing contingency did not get written into the Offer. Good news for radon testing firms. Given a choice buyers will elect to include the Radon Test in their Offer the way most of us select food for our plate from a buffet—if it looks good we’ll take it.

Before including a radon test in your client’s Offer, make sure the client understands the system cost factors and the uncertainty the contingency adds for the seller. Radon is a high risk health hazard. Testing will show radon gas in the house. A low reading is not an indicator that the level is low on average over the course of a year. A safe assumption is the level will rise and fall with the average being more than the EPA action level. A check with a mitigation company will confirm what the EPA tells us–even a high level can be reduced to an acceptable level. The cost is not prohibitive.

With all of the above true, the real reason a radon test contingency is added to the Offer is to give the buyer a chance to force the seller to pay the cost of installing a mitigation system. There are alternatives. A credit (equal to the estimated cost of a mitigation system and followup test) could be included in the Offer with the funds designated for closing cost credits.

Falling into the trap of checking this box to include this test because it’s there and because radon is a health risk will place your client at a disadvantage. The agent who is able to have a logical conversation with a client will allow the client the opportunity to make an informed decision and an opportunity to make a more appealing Offer to the seller….or not. Their choice. Assuming sellers won’t care if the Offer includes a radon testing contingency is something agents will do to the detriment of their client. In those situations, their assumption is your advantage. Sometimes the way to outbid the competition is to out think them. And we all can think.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.