Will we need a new roof for buyer to get insurance?

deaniesueMay 23, 2011

After putting a few thousand dollars into our house (paint, new tile, kitchen backsplash, new faucets, etc.) to pretty it up we got an offer from our 2nd showing. It is pretty low....$13,000 lower than our list price of $165,000. Buyer was concerned with the age of roof (16 years on a 20 year roof). We realize this is going to be a concern for buyers. We have a new AC/Heating system, newer appliances, and we are replacing the carpeting in the bedrooms (the only place there is carpet). So pretty much this is the only forceable future expense.

So, here is my question. In talking to the realtor last night she said that she thinks the roof is going to be an issue with any buyer because they won't be able to get homeowners insurance since the roof is old. Why she waited until last night to bring it up...I don't know. My husband doesn't believe her. He feels she just likes to spend our money (wanted us to get granite counter tops, replace light fixtures, etc.) and since the roof doesn't have any problems (leaks or anything) that the new owners shouldn't have any trouble getting a policy since we were able to get a policy last year with the same roof.

Anyone have experience or insight on this issue?

Separately, I am also concerned that the realtor had us do a "seller's invitation to submit a new offer" instead of countering. She made it sound standard and no big deal. But, now I'm concerned it makes it seem like we aren't taking the offer seriously....which isn't the case. If it helps, we are in Texas.


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weird that you didn't counter-offer, maybe it is a local TX thing?

did you disclose the roof age in disclosre docs? if so, i don't think they are allowed to ask for money/repairs of already disclosed items, as part on inspection negotiation. however, i think they can ask for this in offer/counter, just not as an inspection discovery. this is because it would have been a known fact via disclosure prior to inspection, if you disclosed the roof age. now if leaks show up in inspection, that would not have been disclosed so is open to negotiation as part of the inpsection.

    Bookmark   May 23, 2011 at 10:07AM
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Sweet tea,

Yes, it does appear to be a Texas thing (from what I googled after the fact). Realtor made it seem like no big deal but from a few forums I found it seems to turn buyers off. If we get another offer from this buyer I am not going to do this invitation thing again UNLESS we have other potential offers coming in. This seems to be the only reason to do it (since it doesn't lock you in to anything...but still pretty much lays out your counter offer).

Yes, we did disclose the age of the roof. They didn't ask for a replacement or anything...just mentioned that they were concerned with the age of the roof in the email that accompanied the offer. I think it was their way of justifying the low offer.

Thanks for replying!

    Bookmark   May 23, 2011 at 10:21AM
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My biggest concern is if it is true that a bank or insurance company will nix the deal because of the age of the roof as the realtor is now claiming...

    Bookmark   May 23, 2011 at 10:33AM
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deaniesue - I don't think the invitation to do a new offer is a Texas thing. I've bought and sold several houses in Texas and never heard of it. It is fairly common in Texas for a seller to make oral counteroffers rather than doing so in writing. You got a decent offer -- it might be too low but still decent. If I was a buyer I would think you weren't going to be reasonable if you didn't respond and I would never bet against myself. If I was you I would counter.

Sweet tea - the inspection process, etc. is typically different in Texas. The usual situation is seller does disclosure. Parties agree on terms. The earnest money contract usually has an option period in it (10 days is common). During that 10 day period the buyer can do inspections or whatever and can cancel the contract for any reason. If the buyer thinks the roof is too old or doesn't like the house any more or finds a house the buyer likes better, etc. then the buyer can freely cancel.

If the contract is not cancelled before the option period expires then the right to cancel is over. The contract can be cancelled for other contingencies in the contract such as financing but due to anything else.

So...let's say the buyer does an inspection and decides the roof is in bad shape. The buyer could cancel during the option period. In practice, the buyer typically comes back and either asks the seller to make certain repairs or wants a price concession lieu of repairs. If the they come to an agreement then they usually sign off on it and the terminate the option period.

    Bookmark   May 23, 2011 at 2:16PM
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I can't answer your question, but I would suggest that you contact your current insurance agent and see what if they think it will be an issue.

    Bookmark   May 23, 2011 at 2:35PM
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We did do the "invitation to submit a new offer" form....basically an informal non-binding counter. We went down to $159,900 and included the $3500 in closing cost the buyer requested. I didn't mention anything about the roof (the only mention they had was that they were "concerned with the age"...basically a reason for offering the amount that they did).

I have reasons to believe she can't/won't go above $155,000. Who knows...deal may be dead in the water already. We shall see!

Thanks for the tips.

    Bookmark   May 23, 2011 at 3:56PM
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The use of counter-offer or rejection with invitation to submit a new offer usually depends on the marketability of the property & on the seller:

"Counter-offer" means you have agreed to sell the house to the buyer with certain changes, & unless you withdraw your counter-offer *before the buyer accepts*, you're bound to sell to that buyer even if a better offer comes along in the meantime.

"Invitation to submit new offer" means you have not tied up your house;
if a better offer comes in while this buyer is mulling it over, you're free to sell to the new buyer.

If your home is priced so that it should sell quickly for close to the list price, or if another agent has said "I've got a client coming in this afternoon to write a contract on this house", your agent will probably recommend the rejection with invitation.

Banks & mortgage companies almost never make counter-offers when they sell their REOs (real estate owned) or foreclosed properties.

The age of the roof probably isn't the problem, it's the condition;
if the roof is in good shape & looks like it'll last for some given amount of time, which may vary from insurer to insurer, then the roof won't be a problem.

I certainly wouldn't replace my perfectly well-functioning roof before somebody told me I had to do it or lose the sale.

I wish you the best.

    Bookmark   May 23, 2011 at 5:05PM
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Have you had your roof inspected? I suggest you do that. You might discover that it has hail damage and your insurance will pay for some of a new roof. Or if it's okay the inspecter could confirm that.

    Bookmark   May 23, 2011 at 7:38PM
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We did have the insurance adjuster come out and they said no hail damage. (It's Texas so it was worth a shot to see if we could get it replaced by insurance....we have no issues with the roof...no leaks, no visible issues from the ground at least....)

Tried negotiating with the potential buyer but she won't budge much. She is stuck at $155,000 with $3,000 in closing costs (plus the fridge and new carpet which we already planned to throw in). Similar comps have sold recently in our neighborhood for $158-$160,000 with no closing costs.

    Bookmark   May 24, 2011 at 7:43AM
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Have you had a lot of traffic? How long have you been listed?

    Bookmark   May 24, 2011 at 10:11AM
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You need a roofer to come out not your insurance adjuster. I have known several cases when the insurance adjuster said no hail damage and a roofer said there was. If the roofer finds hail damage he can meet with the adjuster. It's worth trying and it won't cost you anything to have a roofer look at it.

    Bookmark   May 24, 2011 at 1:17PM
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Don't know about TX but when we sold in CA our buyers were also concerned about the roof. We had a certified roofer come out, examine it and gave us a 5 year guarantee on the roof for buyers. Buyers said OK. and the roof was about 17 years old with some repair from wind damage.
Agent cannot give advice on something they know nothing about.

    Bookmark   May 24, 2011 at 1:56PM
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WOW - there is no way I would try to file an insurance claim right as you get ready to move. The companies all are interconnected now and you may have a very hard time finding insurance for the next home. You most certainly will end up paying WAY more for your next insurance if you try to make a claim now.

    Bookmark   May 24, 2011 at 2:35PM
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Some more info:

It was back in April that we had someone who works for a roofing company come to do some handyman work (not related to the roof) and he said he thought there was hail damage. SO we had the adjuster AND the roofing company come out at the same time. No hail damage just showing signs of age.

We already have another home and got insurance with the same company with no problems.

House has been on market for about 2 weeks. 2 showings (1 w/ high interest and was going to come back w/ husband but then nothing...and the 1 offer). We also had 1 cancelled showing as they were tired and decided to cut the day short. There is a lot on the market right now and a lot of new subdivisions going up. We are also in a big military area so showing will (hopefully!) go up in June as they typically are moving in July.

    Bookmark   May 24, 2011 at 3:59PM
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Let's say you think your house ought to sell for at least $158k and you have an offer effectively of $152k ($155k less $3k costs). You may end up getting more and that would be great. Just recognize that you take the risk that with other houses on the market and new subdivisions going up you won't get an offer this month or in June and then you will be in the slowing market and may end up spending way more than $6k in carrying costs by not selling your house before the end of June. Around here (also in Texas) if you don't have a contract by the end of June, sales really slow down.

    Bookmark   May 24, 2011 at 4:32PM
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Unless the insurance company thinks that you damaged your own roof or that the roof was damaged because of your negligence, you shouldn't have any problems getting insurance in the future.

    Bookmark   May 25, 2011 at 12:33PM
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forgot to say that, since you've had a roofer & an insurance person check the roof, the buyer's request for a new roof may be a red herring to soften your negotiating stance on other items.

I wish you the best.

    Bookmark   May 25, 2011 at 12:37PM
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Update: She wouldn't come up on her offer so the deal died. 10 days later we had our 3rd showing and they put in an offer. We have negotitated a deal ($160K w/ $2750 in closing cost). Downside....it's a VA loan. Realtor is worried about appraisal coming in low and I'm worried about lots of things including the darn roof! Guess we will just see what happens! The inspector (and buyers) are there right now. His lockbox key wouldn't work so I went over and let them all in.

Again, thanks for all the thoughts/tips.

    Bookmark   June 3, 2011 at 10:37AM
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