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

The EPA says: Radon is a health hazard with a simple solution. I say install a mitigation system and know the level is guaranteed acceptable year around.

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.

Radon has no known safe level, and it’s everywhere (A lot like mold)

A Radon Test costs between $150 and $300 in the Madison, WI area. A mitigation system ranges from $650 to rarely above $1,200.

A Radon contingency is one of the contingencies  left out of an Offer when  obtaining acceptance matters more than protection against risk.
Because  Radon gas is everywhere there is air, there will be a level of Radon in every building.  Long term exposure to Radon Gas is a health concern of the World Health Organization; for certain, there is no safe level. The level of 4.0 pCi/L was set by the EPA only as a practical level for indoor air. The chance of a radon level at or greater than 4.0 pCi/L from a 48 hour test is great. (WHO recommends three month tests for accurate indicators). The 48 hour test costs $150-$300.  A mitigation system runs $650-$1200 (If you have a bill for over $1,200 in Madison, WI let me know)  regardless of the size of the house.  A mitigation system will not reduce the level of radon gas to 0. The guarantee made by the people who install  mitigation systems is only that the level will be below 4.0 pCi/L….but again, there is no safe level of radon gas. No one is promising to make your home safe from radon gas.
Including a radon testing contingency will not protect  a person from owning a home with radon gas inside the home. It could be effective in allowing the buyer an opportunity to continue negotiations.  Therefore, the contingency will  be considered for its risk to the seller. If the objective of the Seller is getting safely to closing, and they have options which don’t involve testing for radon gas, the Offer with the testing contingency has less appeal than one that does not.  All things considered, zero risk is more attractive to any owner than any risk. And of course the same goes for buyers. Someone has to give.
Given a choice of contingencies it’s expected a typical buyer prefers to have all the contingencies they can get.  For our part, assisting our clients to become informed typical buyers allows them to decide if any contingency is worth the risk to the appeal of their offer.  A chance to make an informed  choice  to decide what contingencies are best and which ones aren’t worth the risk of rejection, is a level of service informed licensees can offer and others will not.
Radon is everywhere, and  levels can be reduced below the practical level for less than the cost of installing gutters on your house or a bit more than twice the cost of the radon test.   Taking the radon testing contingency out of the Offer is one of the surest ways to improve the chance of acceptance.  Having a radon testing contingency will not ensure the house is radon free.