Buying a Home with Propane: What Agents and Buyers Need to Know
Buying a Home with Propane: What Agents and Buyers Need to Know
Properties outside natural gas service areas often use propane. Here's what to look for and how to advise your buyer.
How Propane Systems Work
Propane (LP gas) is stored in tanks on the property — either above ground or buried — and piped to appliances: water heaters, HVAC, stoves, dryers, fireplaces, generators. Unlike natural gas (utility-billed), propane is purchased from a supplier and delivered to refill the tank.
Key Questions to Ask During Due Diligence
Tank ownership:
- Is the tank owned by the seller or leased from a propane supplier?
- If leased: who is the supplier, what are the lease terms, and can the buyer switch suppliers?
- If owned: the buyer assumes ownership at closing — inspect tank condition
Tank size and placement:
- Size (gallons) determines how often refills are needed
- Underground tanks require periodic inspection — confirm no leaks or corrosion history
- Above-ground tanks have setback requirements from structures
Supplier relationship:
- Some leased tanks are "locked" to one supplier — the buyer can't switch without buying out the lease or paying a removal fee
- Get the supplier name and have your buyer call to understand terms before closing
Usage and cost:
- Request propane usage history (gallons per year) from the seller
- Propane costs more per BTU than natural gas — factor into operating cost comparisons
- Rural properties with propane heat can have significant winter fuel costs
Inspection Considerations
Make sure your inspector addresses:
- Tank condition (above-ground: rust, valve integrity; underground: pressure test)
- Line integrity from tank to appliances
- Regulator condition
- Appliance condition and last service dates
If the inspector is not qualified to assess the propane system specifically, request a separate inspection by a licensed propane technician.
Disclosure
Texas sellers are required to disclose known defects. A propane system itself is not a defect — but known issues with the tank, lines, or appliances must be disclosed. Review the seller's disclosure carefully.