Thinking of purchasing a property serviced by well water? You can save yourself potential stress if you include a “subject to a satisfactory water potability test” along with your other subjects, when you write the offer to purchase.
When you are excited about your home purchase, it can be easy to rely on the Seller’s information that “the water is just fine” however; ground contamination can come from places that you may not think of in the heat of the moment, ie a neighbouring septic field.
Some lenders will waive the water potability test with title insurance, however some will still insist on a water test that passes government standards. Page 2, item 9 of this FCT guide discusses coverage through title insurance: FCT Reference Guidelines.
The reason some lenders insist on the test, has to do satisfying their risk assessment requirements. A home without potable water is not considered marketable in the event of foreclosure.
As of the date of this writing, a quote from ALS Environmental for a single test was $205 + tax. For more information on their services, here is their brochure: CANADA Drinking Water Sampling.
If you do arrange a test, and the result does not meet government standards, you can install a filtration system to help remedy the problem(s). If you are working with a lender that insists on a clean test before completion, the water will have to be re-tested after the filtration system is installed.
If it is in fact a requirement for your lender, the request for the water potability test will form a part of the bank’s mortgage instructions. Mortgage instructions are usually only issued closer to the time of closing. So, if you know the quality of the water in advance before you make your deal firm and binding, you will have a smoother process at closing without any added stress.