Home Buyers: Don’t fall in love with a house and ignore the old roof!
I bought my first home before I became a real estate professional. I was in that home for less than two minutes before I knew it was the perfect home for me.
Because I saw the home in daylight, I never noticed that there was no electricity in the detached garage. My cousin gave me an electric overhead garage door opener as a house-warming gift, which of course couldn’t be installed until I ran electric lines to the garage.
I also didn’t pay attention to the fact that "the new roof" advertised by the Seller was a third layer. That was insurable eleven years ago, but isn’t now.
The better insurance companies have the same basic criteria regarding roofs.
- If a roof is ten years old or newer, the property owner can purchase replacement cost coverage on the roof.
- If the roof is 11 – 15 years old, the insurer will write the property insurance, but only if they can write the roof on an actual cash value (ACV) basis.
- And if the roof is over 15 years old, most companies won’t write the insurance period.
By replacement cost, I mean the insured would get a new roof, less their deductible. For ACV, the company would depreciate the roof, and only give the value of what the roof is. So, if the roof was 20 years old, and it was originally roofed with shingles rated for 20 years, than the company could say that the roof is fully depreciated, and not give much to the insured as far as a claim check.
It’s okay to fall in love with your new home’s granite counter-tops, hardwood floors and landscaped yard – you’re SUPPOSE to do that.
Home Buyers: Don’t fall in love with a house and ignore the old roof!
But, please don’t overlook the big ticket items that can drain your bank account in the future:
- roof,
- electrical updates,
- plumbing,
- heating and air,
- hot water heater.
If you are selling your home and can’t afford to roof your home prior to putting it on the market, ask your Realtor about including verbiage stating that a new roof will be installed prior to closing. Many roofing companies work with Realtors and will install a new roof once you have a contract on your home and will wait to be paid out of your closing proceeds.
If you are buying a home and an allowance is made for a new roof prior to closing, ask about the type of shingles the Seller is planning to install and seek guidance from your insurer. You may want to upgrade to a better quality shingle and pay the difference.
Go ahead and fall in love with your new home. Just make sure your Realtor is investigating the condition of the higher repair and replacement components, and don't ever skip the inspections available to you!
Lori Cain is a residential Realtor with Chinowth & Cohen Realtors, serving the greater Tulsa area, including midtown Tulsa, downtown, Owasso, Jenks, Sand Springs, Bixby and Broken Arrow. Visit Lori's web site, LoriCain.com or call 918-852-5036.
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Lori is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa area and specializing in downtown Tulsa and midtown Tulsa real estate.
Hi Lori,
Good stuff, I go through this all the time with buyers and sellers.
Thanks for posting.
Roy Giordano
Good advice, Lori. Great way for the seller not to have to pay out anything for the repairs until safely knowing that the money is in his pocket and a good incentive for the buyer.
Roy - if you're use to your landlord making repairs, that first $650 plumbing bill will blow you over!
Jane - we do that often with roofs - the roofers can start 3-4 days before closing, weather permitting!
Lori, two thoughts. First, I am having a hard time finding insurance for two layers, and if you do it is not replacement for the roof underneath. Second, don't trust the Realtor remarks as to the age of the roof. I looked at a house yesterday with a client that the MLS sheet said had a new roof in 2007. If it was, they found used 20 year old shingles in 2007. My client agreed with me. Make sure that you get an insurance company to inspect the roof for insurability in the 10 day inspection time reference.
Joe, I have one company that I know of that will insure two layers, but you'll pay out the wazzoo for it. But, you're right about getting the roof inspected during the 10-day period. My Buyers looked at a house yesterday that has a 25 year old roof, so we're writing in the offer, "Seller to replace roof with shingle of Buyer's choosing, not to exceed $5,000." My Buyers are prepared to pay the difference to get a better quality shingle.
And, I would add that some people truly don't know if they have multiple layers on their roof, and if that's the case, get it inspected before you LIST the property.
Nice post Lori. Good roofs don't sell houses, but they sure are important. I haven't run into any problems lately, but there's nothing that will make a deal tank faster, is there?
Maybe this blog should be a printed hand-out for all new home buyers. Would save some a LOT of headaches! Great information Lori.
Rich - no, good roofs don't sell houses - it's the granite counter tops! But ignoring that old roof will bite you in the butt in the long run.
Peggy - we have had the weirdest weather in Oklahoma the last five+ years, haven't we? Between ice storms, hail storms and wind storms, our property insurance is skyrocketing due to damaged roofs. A RESPONSIBLE Realtor will look for these things and advise Buyers accordingly.
Lori-I have had buyers who opted to not make an issue of a roof against my advice. Within 6 months of their purchase, the insurance company cancelled their policy. They had to get a new roof in order to get insurance from anyone.
Michele, that's awful that an insurance company can cancel a policy 6 months after issuing the policy.
When clients don't follow my advice, I sometimes ask them to sign a statement that they elected to do something against my advice. I just don't ever want to be put in the situation where it appears I didn't represent my clients well.