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Will replacing my 1960s oil furnace with a natural gas furnace increase the value of my home?

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April 26 2010 - Seattle
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Answers (24)

Yes,  gas is an improvement over oil.  But have you considered a heat pump with gas back up?  I live in Va.  and many HVAC contractors are putting in heat pumps with gas heat as a back up.  They seem to be more efficient.  The gas backup will come on when the outside temperature drops below 34 degrees.  As far as getting rid of your oil tank,  as someone else said,  have the oil tank pumped out and then filled in with the appropriate filler.  Be sure you get someone licensed to do this sort of thing AND be sure you get a certificate that says  your oil tank was property handled.  They will cut the fill pipe off below the ground.  You want to have that certificate in case you ever sell the house.  This has come up will sales I've handled and it can be quite worrisome. 
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December 18 2010
As a broker and general contractor I would have to say yes. Be careful about removing it because it will probably be full of asbestos. You won't believe how dirty your ducts will be and I would reccommend having them cleaned as well. You should also have the tank pumped and filled. Don't remove it. If it has leaked you could be on the hook for abating the contaminated soil. Believe me, I have done it at the insistance of a past client and it was really expensive.
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November 29 2010
A 1960 burner has most likely lived its life ... upgrading your homes utilities is always a good idea! Make sure you shop around - you can get great deals these days!
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November 29 2010
YES!!!!
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November 28 2010
Yes it will. Buyer are more open-minded to the idea of gas because it is considered more modern. It is also more convenient because it doesn't need filling or run-out when you need it.
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October 21 2010
Profile picture for peggy_mw

I have alway's prefered a gas burner than oil ..In fact of the two houses I have owned during my life time I have had the oil burners along with the oil tanks taken out of my cellars and replaced with gas burners..Reason being no big truck delivery in driveway.. Gas is clean burning and no once a year cleaning required..Oil tanks tend to leak over time and need to be replaced..More room in cellar for storage with oil tank gone...Oil prices can change for very costly heating bill.

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October 14 2010
I find this is more of a preference and not something that is good or bad either way.  People tend to not want oil because its more of a mess than natural gas, yet burns more efficiently.  Short answer, No, either way will not adversely affect your value.
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August 27 2010
This is what I would call a "value added" improvement !  I would add the cost to the selling price of my house and ride confidently in realizing that improvemtn in my sales price! Yep; even today's market!   You are making an enormous material/financial improvement to the home. You are obviously in an area that is a heating climate(meaning the energy costs are spent in heating rather than cooling) and the buyer that is smart enough to buy your home, is smart enough to appreciate the added value of your upgrade....
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June 27 2010
I have had many buyers that say "no oil heat". Even though in your case the furnace change over might be easy, a buyer still has to make that mental leap to be okay with making the change, and most importantly, buyers worry. They think "what if the there is a problem switching over, or what if it costs more than expected"? These concerns can all be addressed in the purchase and sale agreement, but the goal should be to make your home the most attractive as possible to the average buyer. Most people want natural gas, so it makes sense to give it to them.
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June 26 2010

It very well could increase the value, unless your area is different and has mostly oil heat.  Most buyers are more comfortable with natural gas when available.  They do not have to fuss with getting it filled.  I know it is not a big deal but they don't know that yet.   It could be a question of not if it will increase the value but will it allow it to sell. In our area having oil heat could prevent it from selling because there are so many to choose from that have the type they are comfortable with.  Keep an eye out for any tax credits that might be available for the change over, especially if you get one that is higher efficiency.  One other consideration is how much other work does the property need.  If it needs a lot of work it my not have the same return as it would if the rest of the house is in good condtion.

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June 18 2010
Value is in the eye of the buyer.  I've never had a buyer looking for oil heat...not to say they don't exist.

One thing to be sure of is that you remedy the existing oil tank according to local county regulations.  I just sold a house and FHA put us through the ringer due to the sealed oil tank still in the house. 

Don't wait for that to happen
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June 18 2010
I've never seen a buyer who's eyes didn't light up when they saw, "New Central Unit/Furnace".
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June 18 2010
Profile picture for smbelaen
As a buyer, we refused any house that did not have forced air that used natural gas.  Oil, propane, baseboards, or whatever else is out there that's old and costly, we deliberately overlooked.

Would I pay more for a house that had forced air over baseboard/propane?  No, I would not pay more. I simply wouldn't have bought it.
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April 30 2010
You might want to check into the cost factor first. Depending for instance on where the nearest gas line is located, whether or not you're on a slope or hill, have rockery etc. it could get expensive. For example, if your street features concrete panels and a lot of these need to be broken up and then replaced, it adds up. I was told it cost about $5,000 just to replace one panel.
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April 29 2010
I would recommend it. It will save you $$$ now by being more efficient and will not be a turnoff for the future buyers.
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April 28 2010
Most buyers want current or up-to-date appliances and equipment in the home that they are considering for purchase.  Although this may not impact the actual overall value of your home, it could positively impact how long it takes for your home to sell (assuming this is why you are asking the question).  Plus, your home will appeal to a wider range of buyers... you could possibly be narrowing your range of buyers by not replacing it.  Also, keep in mind that there are a TON of homes on the market right now and that buyers have a good selection of homes on their radar.  If it came down to your home and another home, a buyer will probably look at the little things and your oil furnace could be a negative for that buyer.  Good luck!
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April 27 2010
The change will certainly make the home appeal to a wider range of buyers. Many buyers steer clear of oil - or have concerns over the oil storage tanks that end up being a deal breaker. So while the switch may not significantly increase your selling price, it should decrease your time on market!
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April 27 2010
Profile picture for wetdawgs
My humble opinion is that the replacement of the oil furnace with a natural gas furnace would make selling easier, but probably not have a significant impact on the price of the home (max $1000 to $2000 increase).      If you chose not to replace the oil furnace, you may find a lot of buyers either bailing after inspection or requesting a discount so they can do the change.   Buyers tend to request more $$ for the change than it will actually cost, so if you've done it in advance you'll have saved the headache. 

Plus, there is the issue of the oil tank.   Mitigate that issue also before putting the house on the market.  If I were your potential buyer, that would be a VERY big issue!

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April 26 2010
The answer to almost every such question is, "It depends".  


The actual dollar and sense value of a home with gas vs. oil is difficult to determine and varies wildly depending on the current cost of oil.  Some buyers do not care.  Some will not go near a house with oil heat.  

Overall, I would say it is an improvement in a buyer's eyes.  But if you are planning on selling the home soon, I don't see a point in making the conversion now.  Make the conversion if you would prefer gas heat for the remaining time in the home.  I am not a big fan of making drastic improvements to sell a home.  They are rarely cost effective.


One more thought.  If you do run a gas line from the street, make sure it is large enough to support multiple appliances.  4 is a god number.  That way even if you don't use them all now, a future buyer can see that they could ad appliances to the line at a later date at a much smaller cost.  



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April 26 2010
As I recall the cost of heating oil has skyrocketed while natural gas is still somewhat affordable. If nothing else your energy bills will be less.

There are also tax incentives for making energy improvements. But the caveat is the tax incentive is a credit on what you owe Uncle Sam. So if you qualify for a tax credit of $1,500 but only owe Uncle Sam $200, you will get a tax credit of $200 to wipe out your tax debt. (This is different from the First Time Homebuyers Credit).

Talk to a qualified heating and cooling contractor AND a qualified tax professional if this what you want to do.
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April 26 2010
I agree that a working furnace is a must.  Where there are some definite advantages to oil heating, the experiences I've had lately with buyers is that a lot of them enjoy cooking with gas & feel that an oil furnace is very dated. 

Some of my buyers do not even look at homes with oil because of the cooking aspect. 

I think it would increase value to open up your market to a larger group of people for resale.  While it isn't one of my largest concerns, it is for a lot of people.

Good luck~

Beth
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April 26 2010
No, a working furnane is a must have for any buyer considering to buy a home.

Now, if you had a heat pump A/C that would increasee the value a bit.
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April 26 2010
Hi - it may not increase the value of your home, but it will certainly make it more marketable.  You also will avoid buyers asking for seller credits to replace the system as well as avoiding possibe negative inspection items.  Be sure to decommission the oil tank as well.  Good luck.
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April 26 2010
Marginally, yes, unless you can demonstrate that the oil tank is in good shape and that the burner is one of the high efficiency types.  If these two issues are good then, no.

Look at it in terms of cost for the fuel.  Gas isn't as inexpensive as it used to be.

A newer furnace may give you some space savings though.  Get a quote for each type (new) and see what the costs are.
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April 26 2010
 
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