Question for those who have oil heat

[chrissyk]

My sis may be looking to buy a house that has oil heat (cold climate). Even if the previous homeowners have a rate lock, I'm assuming that that wouldn't transfer over to the new owner, right? What options would she have for locking a rate at this point? Would she be stuck with a very high market rate? Are any places still offering discounts for prebuying a set amount of fuel oil at this late date? I've never had oil heat, so I don't really know much other than that my family and friends with oil seem to prebuy in the summer for the following winter. Obviously that is not possible in this case.

 

[Melrosgirl]

She'd have to check with the oil companies,but I'm guessing she wouldn't be locked in to anything.

 

[chrissyk]

She'd have to check with the oil companies,but I'm guessing she wouldn't be locked in to anything.

That's pretty much what I figured. Even if the present homeowners have a rate lock, there's probably no way to transfer that I'm guessing. Why would the oil company be that generous when they could stick the new customer with the market rate I've been encouraging her to wait until after this winter to buy, but this really is a nice-looking house for what I would term a decent price in her $$ area.

 

[DawnCt1]

Rate locks are usually "pre purchases" in our area. If I were to sell my house now I have paid for the oil to be delivered so I would sell that future oil to my new buyers. It would be 750 gals. at $1.93. Bottom line is, is it a prepaid volume of oil or a promise to sell at a particular rate?

 

[Cindy B]

No, it doesn't transfer. Usually I buy in the summer 1/2 tank(July) and another 1/2 tank or so in March.

We didn't buy this summer, we got busy and forgot.

 

[Mskanga]

I would say that it will probably stay the same because the price is based in the usage of the home and the area, not based on who lives there. I go through the same thing with propane and no matter who lives in my house the price is the same , it's the amount of usage and the area what matters.
Good luck , I was able to lock at 1.94 a gallon of propane as the cap price that I will pay until July 2006.

 

[chrissyk]

Rate locks are usually "pre purchases" in our area. If I were to sell my house now I have paid for the oil to be delivered so I would sell that future oil to my new buyers. It would be 750 gals. at $1.93. Bottom line is, is it a prepaid volume of oil or a promise to sell at a particular rate?

I'm actually not sure if the seller has either prebought or locked, but my sister has this on her list of things to ask about. It sounds like the prepaid contract would be ideal, since she could then just buy out the contract from the seller? That would be great. I think that the market rate is somewhere near $3.00/gallon right now otherwise Unfortunately, heating costs are becoming a huge consideration when thinking about buying a home in a cold climate.

 

[Tiggeroo]

would the current owner be willing to fill the tank now at their locked in rate and have your sis pay for that price. That or firewood will be the only solutions I think.

 

[chrissyk]

would the current owner be willing to fill the tank now at their locked in rate and have your sis pay for that price. That or firewood will be the only solutions I think.

I don't know...I'll let her know that that's definitely something that she should ask about, though! I don't think that firewood would be a solution...there's no fireplace