Buying or selling homes that get water from a private well can present some unique challenges. In Ohio, any home with a working well being used must have that well inspected and approved by the County Board of Health as part of the sale of real estate. Most often, a Board of Health employee will take water samples from within the home to send out to the appropriate independent lab. Some Counties, however, allow non-employees to send samples of the water directly to those labs. This could be done by either the Seller or Buyer of the home.

Though some Counties accept the labs’ findings regardless of who took the samples, this is not the case with many lenders who are also interested in the well water test results. Allowing the Buyer or Seller to send in test samples without oversight allows for the possibility of a party using fraudulent water obtained from a different source. Samples collected by any parties with personal interests tying them to the sale would not be considered sufficient proof during the loan process. Underwriting requires testing of well water to be conducted by a third party and at arm’s length.

What is an Arm’s Length Third Party?

An arm’s length third party means and assures that the parties to a transaction are independent of one another and could not be seen as having shared interests. For example, the buyer nor the seller would be able to test the water as they have a direct interest in the transaction. This would also mean that their respective real estate agents would not be able to take part in the sample either.

If during the underwriting process it is determined that the sample or test were not conducted by an arm’s length third party, the loan process will pause until the testing process is done correctly. This can cost people both time and money.

Who can test?

Our recommendation, to minimize the chances of an unexpected setback during the loan process, would be to have the County Board of Health conduct the test. This route offers the best chance for the loan process to go smoothly and be completed on time.