Market Updates & All Things Real Estate!

Let's talk about.... How to negotiate a NEW ROOF for the home you are buying!

July 25th, 2022 9:22 PM by Margaret Michelle Williamson

The age of roofs are a huge issue right now in the real estate and insurance worlds. Most of the roofs in Southwest Florida were replaced after Hurricane Charley in 2004/2005. A lot of those roofs are now being replaced either because of condition or because they cannot be insured at an affordable price. 
So what happens when the roof fails an inspection and/or is uninsurable? Can the seller still sell the home? Can the buyer still obtain their financing? 
?Most people would think that the seller would just need to wait for a cash buyer that is willing to buy the house and replacing the roof after they close. However, that is not the case! 
There are a few ways to negotiate a new roof. Let’s say the house is listed for $200,000 and the new roof will cost $20,000. 
1. You can offer $200,000 and request that the seller install a new roof before closing.
2. You can offer $210,000 (basically splitting the cost of the roof with the seller) and request that the seller install a new roof before closing. 
3. You can offer $220,000 (basically you are rolling the new roof into your loan) and request that the seller install a new roof before closing. 
But what happens if the seller doesn’t have the funds to install a new roof before closing? 
Most sellers cannot afford to put on a new roof before closing. Here is a special way to get around this. 
After the house is sold, the title company will hold back $20,000 from the seller’s proceeds and then the new buyer can have the roof replaced. (If the seller was going to make $100,000 off of the sale of the property, the title company would give them $80,000 and keep $20,000.) The title company can pay the roofer directly with the $20,000. The verbiage on the contract may look a little like this: 
“Seller to pay for a complete roof replacement which costs will be held in escrow after closing. Roof will be completely replaced within 60 days after closing. Seller to provide estimate from roofing company within 10 days after execution of contract. Funds will be paid from the title company straight to the roofer.”
The best part is that this can all be completed even if the buyer is obtaining a loan! You do not need a cash buyer if the roof fails inspection. 
There are plenty of creative ways to get around repairs that are needed. Make sure the agent you work with doesn’t give up at the first sign of a hurdle. As an agent, our job requires us to think smarter and find legal and creative ways to get over hurdles that come up! 
We are here for you! If you are ready to buy or sell, you can trust that we will do whatever needs to be done for your success! 
(As always, we are not attorneys. The above is not legal advice, just friendly advice from your local real estate agents.)
Posted by Margaret Michelle Williamson on July 25th, 2022 9:22 PM

Archives:

My Favorite Blogs:

Sites That Link to This Blog:

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question