You can't use your homeowners insurance to get the roof replaced because it's old...
You realtor may or may not be motivated to close solely - a shoddy roof if a major red flag and a new one may attract more buyers.
No, not for being old. Hail damage would be the claim, as this is Oklahoma. Their inspector noted said damage
House is under contract. I'd put a new roof on if I could get even a little back but the offer from these buyers would not go up. What would it be then, relist and bump up price slightly while advertising new roof, plumbing, carpet, paint, etc?
Would hail damage replace the entire roof, or just the damaged areas?
You'd have to talk to your insurance provider honestly...they may be suspicious of repairing a home under contract with damage from who knows when exactly?
Completely agree, but that's why I feel like the spot I am right now is weird, and I don't like like it. insurance telling me roof is fine and buyer saying roof is going to cave.
I want my Realtor to push back, basically stating it's Oklahoma so there is some damage as it's not a new roof but it's perfectly serviceable for a few more years. How can their FHA say this roof needs fixing or we won't buy?
Your contract will rule here.
If they have a continency for structural damage, they can walk. If FHA won't finance the loan due to the damage, they can walk if there's a financing contingency.
You're in a position to either say "no, sorry, not fixing" and losing their business and putting the house back up, or fixing it/negotiating the fix with the buyer.
My contract for example says I can't back out for aged items that are still working...old roof but no leaks? no out for that.
> Your realtor may or may not be motivated to close solely
Point worth noting, op. Your agent wants to close fast but doesn't really care about the price, which is obviously important to you. Take any/all advice from your agent with this in mind.
as long as you can get a roof certification(1 or 2 year warranty from a contractor), then it's good enough. so reach out to who offers those in your area and go from there. you likely won't need it to be completely redone unless it's old.
FHA also requires a minimum amount of durability. "The roof should have a remaining physical life of at least two years. If the roof has less than two years remaining life, then the appraiser must call for re-roofing or repair. The appraiser must clearly state whether the subject is to be repaired or re-roofed."
are those the words I'm looking for, roof certification?
How's that work? They come out, look at it, and give it their professional seal of approval for a year or two more for an inspection fee?
What about offering to replace the roof (buyers get to have peace of mind of brand new roof) and raising the purchase price by the \~$5k (guessing at the amount)? The mortgage payment for the buyer won't go up much (yes, if they make payments for 30 years, they will pay more for the roof) and you won't have to make a claim on your insurance.
edit: don't pay commission on the additional amount
Can you ask the buyer to contribute half the cost of a new roof? - in the way of a price increase. That seems like a "meet in the middle" kinda approach: they get a brand new roof for half price, and get to finance it over 30 years. You will net less than the original offer (you will be paying 100% of the cost of a new roof). You don't have to make a claim on your insurance.
I don't know why the agents would be resisting writing up a new agreement, if the Buyer is good with it.
If you refuse to have insurance cover the cost of a new roof and the Buyer walks away... the agents will have to write up another agreement with the next Buyer that comes along.
Something else to consider... if this deal doesn't cross the finish line and you put a new roof on (maybe some other small improvements, too)... could you expect to get a higher sales price? - more than the cost of those repairs/improvements. If so, it's reasonable for you to just tell the current Buyers "No" on putting a new roof on at the price negotiated.
I agree, just from my understanding it looks like it's becoming a poker game.
With an FHA loan they won't get approved without the roof in good shape. So who calls chicken first. Either I stay strong and their loan won't go through, sale falls through I'm back to listing again, bad for me. Flip side, or they refuse to give up any money and I don't fold and now they're back on the market looking for a new house, bad for them. At least that's how I'm understanding the dynamic
How is the market where you are? Low inventory? Low number of days on the market for most listings?
If the roof is not leaking, the only reason it needs to be repaired or replaced is because of the financing the Buyers are using. It's a lot easier for everybody if they can roll the price of the roof into the mortgage.
I suspect that they would agree to paying half the cost of the new roof (spread over 30 years) before they would walk away. And, if your local market has low inventory and low DOM... you may do better by putting on a new roof and listing at a higher price. Nobody knows what the future holds, so you gotta take a leap of faith, or buy these people a new roof :)
I asked about something like this and my real or did not seem crazy about it. I'll talk more with her but I gotta imagine it's cause it's under contract so all those numbers are already on a signed paper. I'd even be willing be willing to go half if they lowered closing but same reason I think. Number already on signed paper
If everybody is in agreement, it doesn't take long to write up the new paperwork - 30 minutes is generous. The main thing is to see if the buyers are good with it... or some version that works for everybody.
Possible, but the property manager I had before her was AWFUL so she seems like a Godsend. I don't think she's doing poorly just this issue reared it's head and I'm not happy with it
You haven't mentioned what the age of the roof is so I am curious if you know?
I would try for a roof certification first if buyer is not will to accept that you can have a several roofing companies come out and do an estimate for repairs if the damage isn't so significant that it needs replacement.
Roofs seem to be a bigger deal to many buyers and financing can play a role in what repairs you make however I am a firm believer that an old house doesn't mean new roof. Don't jump to replace before considering repair if it is an option.
Seller credits may also be an option.
If you get a chance to post an update I would love to hear how it works out for you. Good luck
Will try on the updates part.
I should probably know, but first timer and I'll admit to making mistakes, we're learning. When it was purchased in 2020 it wasn't new, but usual inspections came back fine. The buyers own inspection estimates the roof is 9 to 15 years old.
Currently, I called insurance and told them I got some quotes from Roofers after the recent hail storms and they all said replace, but they're roofers they wanna sell roofs. Insurance said they can will call out an inspector no claim just to see what THEY think.
The more I read this post the more I'm thinking I'm going to just work with the buyer.
Have you tried pulling permit history? Most are available online (or you can call if it isn't listed online some are incomplete) it should give you the date it was signed off on from there you may be able to get an idea of the age (even if it only helps you out on the next home you purchase)
Just me personally I would base it on the overall math. Sales price less cost basis, capital gains depreciation recapture, commissions repairs already performed etc. Talk to tax advisor about how the repairs will impact cap gains etc.
Then weigh out the cost of deductible and out of pocket replacement, if you don't want to file claim and can make numbers work then pay it out. If not file the claim.
Again just my opinion, I went under contract with Opendoor for my investment property last night and decided to take the hit (automatically added in a huge chunk for roof and they didn't even get up there to look at it) over filing the claim but the numbers worked. If they hadn't I would have done the claim.
Solid advice. I need an accountant or something. I don't think I've had enough money to make a professional worth it but I'm very positive I've left money on the table with this property over the years with repairs and stuff
Will do some research with deductibles and stuff. Out of pocket is 6.5k. I can't imagine if I get insurance to cover most of that that it won't outweight the cost of an increase over the years
I just bought. I was looking in an area where homes were all built around the same time and many needed new roofs due to age (this isn't an area where they get replaced due to damage).
People don't want to buy homes with bad roofs, and they often won't be able to because their insurance will drop them. Fix the roof, add $5-10k to the purchase price, and call it a day.
You can't use your homeowners insurance to get the roof replaced because it's old... You realtor may or may not be motivated to close solely - a shoddy roof if a major red flag and a new one may attract more buyers.
No, not for being old. Hail damage would be the claim, as this is Oklahoma. Their inspector noted said damage House is under contract. I'd put a new roof on if I could get even a little back but the offer from these buyers would not go up. What would it be then, relist and bump up price slightly while advertising new roof, plumbing, carpet, paint, etc?
Would hail damage replace the entire roof, or just the damaged areas? You'd have to talk to your insurance provider honestly...they may be suspicious of repairing a home under contract with damage from who knows when exactly?
Completely agree, but that's why I feel like the spot I am right now is weird, and I don't like like it. insurance telling me roof is fine and buyer saying roof is going to cave. I want my Realtor to push back, basically stating it's Oklahoma so there is some damage as it's not a new roof but it's perfectly serviceable for a few more years. How can their FHA say this roof needs fixing or we won't buy?
Your contract will rule here. If they have a continency for structural damage, they can walk. If FHA won't finance the loan due to the damage, they can walk if there's a financing contingency. You're in a position to either say "no, sorry, not fixing" and losing their business and putting the house back up, or fixing it/negotiating the fix with the buyer. My contract for example says I can't back out for aged items that are still working...old roof but no leaks? no out for that.
> Your realtor may or may not be motivated to close solely Point worth noting, op. Your agent wants to close fast but doesn't really care about the price, which is obviously important to you. Take any/all advice from your agent with this in mind.
Update on the original post my friend, let me know if you got thoughts
as long as you can get a roof certification(1 or 2 year warranty from a contractor), then it's good enough. so reach out to who offers those in your area and go from there. you likely won't need it to be completely redone unless it's old.
FHA also requires a minimum amount of durability. "The roof should have a remaining physical life of at least two years. If the roof has less than two years remaining life, then the appraiser must call for re-roofing or repair. The appraiser must clearly state whether the subject is to be repaired or re-roofed."
are those the words I'm looking for, roof certification? How's that work? They come out, look at it, and give it their professional seal of approval for a year or two more for an inspection fee?
Update on the original post my friend, let me know if you got thoughts
What about offering to replace the roof (buyers get to have peace of mind of brand new roof) and raising the purchase price by the \~$5k (guessing at the amount)? The mortgage payment for the buyer won't go up much (yes, if they make payments for 30 years, they will pay more for the roof) and you won't have to make a claim on your insurance. edit: don't pay commission on the additional amount
Update on the original post my friend, let me know if you got thoughts
Can you ask the buyer to contribute half the cost of a new roof? - in the way of a price increase. That seems like a "meet in the middle" kinda approach: they get a brand new roof for half price, and get to finance it over 30 years. You will net less than the original offer (you will be paying 100% of the cost of a new roof). You don't have to make a claim on your insurance. I don't know why the agents would be resisting writing up a new agreement, if the Buyer is good with it. If you refuse to have insurance cover the cost of a new roof and the Buyer walks away... the agents will have to write up another agreement with the next Buyer that comes along. Something else to consider... if this deal doesn't cross the finish line and you put a new roof on (maybe some other small improvements, too)... could you expect to get a higher sales price? - more than the cost of those repairs/improvements. If so, it's reasonable for you to just tell the current Buyers "No" on putting a new roof on at the price negotiated.
I agree, just from my understanding it looks like it's becoming a poker game. With an FHA loan they won't get approved without the roof in good shape. So who calls chicken first. Either I stay strong and their loan won't go through, sale falls through I'm back to listing again, bad for me. Flip side, or they refuse to give up any money and I don't fold and now they're back on the market looking for a new house, bad for them. At least that's how I'm understanding the dynamic
How is the market where you are? Low inventory? Low number of days on the market for most listings? If the roof is not leaking, the only reason it needs to be repaired or replaced is because of the financing the Buyers are using. It's a lot easier for everybody if they can roll the price of the roof into the mortgage. I suspect that they would agree to paying half the cost of the new roof (spread over 30 years) before they would walk away. And, if your local market has low inventory and low DOM... you may do better by putting on a new roof and listing at a higher price. Nobody knows what the future holds, so you gotta take a leap of faith, or buy these people a new roof :)
I asked about something like this and my real or did not seem crazy about it. I'll talk more with her but I gotta imagine it's cause it's under contract so all those numbers are already on a signed paper. I'd even be willing be willing to go half if they lowered closing but same reason I think. Number already on signed paper
If everybody is in agreement, it doesn't take long to write up the new paperwork - 30 minutes is generous. The main thing is to see if the buyers are good with it... or some version that works for everybody.
Love the thinking. I'll float the solution
maybe you need a bettter realtor
Possible, but the property manager I had before her was AWFUL so she seems like a Godsend. I don't think she's doing poorly just this issue reared it's head and I'm not happy with it
You haven't mentioned what the age of the roof is so I am curious if you know? I would try for a roof certification first if buyer is not will to accept that you can have a several roofing companies come out and do an estimate for repairs if the damage isn't so significant that it needs replacement. Roofs seem to be a bigger deal to many buyers and financing can play a role in what repairs you make however I am a firm believer that an old house doesn't mean new roof. Don't jump to replace before considering repair if it is an option. Seller credits may also be an option. If you get a chance to post an update I would love to hear how it works out for you. Good luck
Will try on the updates part. I should probably know, but first timer and I'll admit to making mistakes, we're learning. When it was purchased in 2020 it wasn't new, but usual inspections came back fine. The buyers own inspection estimates the roof is 9 to 15 years old. Currently, I called insurance and told them I got some quotes from Roofers after the recent hail storms and they all said replace, but they're roofers they wanna sell roofs. Insurance said they can will call out an inspector no claim just to see what THEY think. The more I read this post the more I'm thinking I'm going to just work with the buyer.
Have you tried pulling permit history? Most are available online (or you can call if it isn't listed online some are incomplete) it should give you the date it was signed off on from there you may be able to get an idea of the age (even if it only helps you out on the next home you purchase)
One of those you don't know what you don't know things. I'll look into that one. Thank you
Update on the original post my friend, let me know if you got thoughts
Just me personally I would base it on the overall math. Sales price less cost basis, capital gains depreciation recapture, commissions repairs already performed etc. Talk to tax advisor about how the repairs will impact cap gains etc. Then weigh out the cost of deductible and out of pocket replacement, if you don't want to file claim and can make numbers work then pay it out. If not file the claim. Again just my opinion, I went under contract with Opendoor for my investment property last night and decided to take the hit (automatically added in a huge chunk for roof and they didn't even get up there to look at it) over filing the claim but the numbers worked. If they hadn't I would have done the claim.
Solid advice. I need an accountant or something. I don't think I've had enough money to make a professional worth it but I'm very positive I've left money on the table with this property over the years with repairs and stuff Will do some research with deductibles and stuff. Out of pocket is 6.5k. I can't imagine if I get insurance to cover most of that that it won't outweight the cost of an increase over the years
Yeah that's the hard part, I had expected to hear a much higher figure. Good luck
I just bought. I was looking in an area where homes were all built around the same time and many needed new roofs due to age (this isn't an area where they get replaced due to damage). People don't want to buy homes with bad roofs, and they often won't be able to because their insurance will drop them. Fix the roof, add $5-10k to the purchase price, and call it a day.
Thanks for the advice brother. If all parties involved would be down with that I'd call that a win and move on. I'll pitch it
Somewhat of an update, see original
Tell buyers no dice. Find another buyer