It’s that dreaded time of year for those of us who heat our homes with oil to roll the dice and decide whether to lock in our oil prices for the season, buy in advance, or pay as we go. The subject is discussed at the dinner table, in the grocery stores, and at neighborhood gatherings. It is a gamble and no one wants to be on the end of an “I told you so.”

You won't get any advice from me. I've guessed right one year only to make the wrong decision a year later.

When I first started selling real estate, home heating oil was about 25 cents per gallon delivered. (Yes, I’ve been in the business that long.) To fill an average home oil tank cost about $65.00. We didn’t do “oil adjustments” at closings back then because the adjustment really wasn’t enough to worry about. Today at a real estate closing, in most cases, buyers will reimburse the sellers for any oil in the tank.

In the past few years, buyers have been asking sellers not to top their tank before closing since that reimbursement can get pretty large with oil prices well over $3.00 a gallon for a 275 gallon tank. In some cases, the oil adjustment is larger than the property tax adjustment. 

I’ve been present at a few closing table discussions where buyer’s questioned the oil adjustment amount or even whether the buyer should be paying for the seller’s oil at all, but the language of the sale’s contract is pretty clear:

Adjustments: Unless otherwise stated in this Agreement, all adjustments of taxes, water, sewer, interest, condominium fees, rents, fuel, etc, will be made on the day of closing….

Despite the rising cost of heating oil, buyers still seem to prefer oil heat over electric. Propane is available in only a limited number of homes in Ledyard and the natural gas line that runs up Route 12 doesn’t service many residential customers.

Despite the limited availability of natural gas in our area, according to Heat USA, natural gas is the most popular home-heating fuel in the United States while oil is a very distant third and is found primarily in our neck of the woods. I guess we are just lucky, huh?