Buying a house that needs a new roof
Buying a new home can be complicated, confusing, and chaotic, with a lot of cooks in the kitchen. It’s easy for some things to fall between the cracks. But if someone is selling a house that needs a new roof it could complicate matters slightly. Any roof issues should definitely be addressed before closing on your new home.
You see, needing a new roof doesn’t have to be a deal breaker. A home’s roof needs to be replaced about every 20 to 25 years, depending on the type of roofing materials and the quality of the installation. While minor repairs may be needed before that time, replacing a roof is inevitable for any homeowner planning to stay in the home for more than 15 years. Most home buyers looking at houses older than 25 years will almost certainly need to replace the roof if it has not already been done.
If the home you are purchasing is in need of a new roof, the best time to do that is at the closing table. Not only is this a convenient option from an installation standpoint, as the property is unoccupied, and your belongings protected, but it is also the most cost effective for your family. There are some caveats that you should be aware of.
Can I even get a mortgage on a house that needs a new roof?
To buy a home and get the lender to release funds, you must have an active homeowner’s insurance policy that takes effect on the date of closing. Buying a house that needs a new roof will only affect your ability to get a mortgage if your insurance company refuses to cover the home until repairs or replacement are made. Some insurance companies will allow 30 days for the repairs to be made while still offering you the coverage you need at closing. Different situations can lead to different answers.
When the home inspector sees damage from the ground.
The Standards of Practice of InterNACHI (International Association of Certified Home Inspectors) does not require that the inspector actually walk on the roof, but allows him to observe the roof from the ground where little of the roof can be seen. This means that he’s likely to only see very serious roof damage. If the inspector sees roof damage, they may recommend a full roof inspection. As a general rule, if the damage is bad enough to see from the ground you will not be able to get insurance or a mortgage until it is repaired.
When you request a roof inspection to ensure it is in good condition prior to closing.
If you request the roof inspection, you might be able to get the seller to pay for it, as well as repair it before closing. If you prefer to have the work done yourself, you can negotiate a lower price based on the cost of the roof replacement. Before making a decision, you should talk to your insurance company about when this should be completed for coverage to begin.
When a roof inspection is completed and shows no immediate need for replacement.
Because a roof inspection is not a standard part of buying a house, even a very bad roof might fall through the cracks and allow you to move forward with no incident. The lender or homeowner’s insurance company may require a roof inspection if it is suspected that the roof is old or has serious damage. The roof inspection could pass or fail depending on the inspector and the lender or insurance companies own policies and the severity of the damage, even though they are all looking at the same roof.
As the buyer, you can also request a roof inspection if you suspect roof issues just so that you can prepare for the investment.
A quality roof inspection includes:
- Getting on the roof and walking every inch to determine if the roof needs to be repaired replaced, or if it has some years left on it.
- Inspecting flashing and seals to ensure they are still protecting your home from leaks.
- Examining the interior and exterior of the home for active or previously repaired areas.
- Determine if current or prior leaks may have caused water or structural damage.
- Determining if your roof has the appropriate shingles and that they are installed correctly, which is required for safety and manufacturer warranties.
What happens if the home fails the roof inspection?
Regardless of who requested it, if your home fails a roof inspection it could cause some issues with getting a mortgage. All lenders require home buyers to obtain homeowner’s insurance that will be effective at closing, and evidence of that policy must be provided. If your home fails the roof inspection ordered by the insurance company or lender, you will have a very difficult time getting a policy to cover the home, which will put your lender off.
But that doesn’t mean that the home sale can’t happen. Once it has been determined who will be responsible for the roof replacement costs and what that replacement will entail, the repairs can be made prior to closing with the roofer being paid at that time. You won’t be able to actually start your homeowner’s policy until the roof has been repaired, so it is a good idea to make sure
What are the tell-tale signs that the house I am looking at needs a new roof?
If you manage to get through the purchasing process without a roof inspection, you might still want to have an idea of the condition of the roof when negotiating with the seller on price. There are some easy ways to tell if the home has roof damage that needs to be repaired or replaced right away.
- Request home maintenance records from the seller to determine the age of the roof. Even if the roof is fine for now, a roof that is 10 to 15 years old is more likely to need replacement.
- Check the gutters and downspouts for asphalt granules from deteriorating shingles.
- Determine what material was used in the current flashing. Flashing is used to seal the seams in your roof to protect against leaks. If it is made of tar or cement you should consider replacing with metal flashing for more durability and protection.
- Step back as far as possible so you can see more of your roof. Look for signs of moss, displaced or warped shingles, or obvious sagging, you need to assume the roof should be replaced.
- Check the ceilings and corners of the rooms in the home. Discoloration or stains are a good indication of roof leaks and hidden water damage.
- If you’re still not sure, contact us to schedule an inspection and estimate, during which we will inspect your roof to determine what, if anything, should be done in the near future.
Does the buyer or seller pay for a new roof if one is needed?
Whether the buyer or seller pays for a new roof depends on their negotiations and agreement. Who pays for necessary repairs, and what repairs will be made before closing, can vary greatly from one contract to another. The best way to handle it, however, is to have the roof replaced before closing and payment dealt with at that time.
If the buyer wants the seller to pay for a new roof, that can be done without having to come out of pocket if there is sufficient equity in the home. There is also the ability to upgrade shingle type, change color, or upgrade warranty based on the buyers’ preference, with any upgrades added to the contract as a “buyer cost” and also paid at the closing table.
The closing attorney cuts Rennison Roofing a check for balance due and remaining balance is paid to the seller. If the buyer has to pay for the repairs/replacement, the selling price of the new home could be increased by the amount required, and costs rolled into the mortgage payments. The buyer still has the option to customize their new roof with shingle type, color and warranty preference to suit their needs. The upgrades may be added to the contract as a “buyer cost” and also paid at the closing table.
Then, if chosen, the GAF Golden Pledge Lifetime warranty could be put in the new buyer’s name and still have the ability to be transferred if ever they wanted to sell the home. It’s a win/win for the buyer and seller! We think David Brock, Director of ERA Wilder Commercial Realty put it best, “If you can get a new roof included in the cost of your new home and not worry about it for 25-50 years, that’s a win-win for everyone!”
Will a new roof affect the appraisal of the house?
You might think that a replaced and upgraded roof would automatically add value to the house, and therefore affect the appraisal. Surprisingly, a new roof doesn’t usually affect the home’s appraisal. This is because the home’s value goes up only 60% of the actual roof replacement cost. With an average replacement cost in the Columbia area of around $8,000 to $10,000, that doesn’t add a significant amount to the value of the home.
How to negotiate roof replacement when buying a home
Once it is determined that a roof replacement is necessary, new discussions must be had between buyer, seller, and other interested parties. Even if you already had predetermined terms, you will need to renegotiate once roofing services become involved.
In negotiating the roof replacement, it must be determined how the roofing company will be paid, how much of the cost each party will shoulder, and what, if anything, will be added to the purchase price.
There are a few things you should keep in mind during negotiations:
- If the seller replaces the roof before closing, will you have the option to choose a roofing service and the materials used to ensure a quality roofing job?
- If a roof inspection was requested by anyone other than yourself, you should get your own independent estimate for comparison, and you can insist on using that particular vendor.
- What percentage of the cost of roof replacement will be assigned to the buyer or the seller? If you have above average negotiating skills you might be able to get a better deal, but the norm is a 50/50 split between the seller and buyer.
- How and when will the roofer be paid? When you work with Rennison, we will wait until closing for payment to simplify matters.
The first step in negotiating a new roof is making sure that it is necessary and getting your own estimate. We are happy to assist you with a free estimate that includes a complete roof inspection at no cost to you. Once you know what you’re working with, you can go to the seller armed with knowledge and facts that they will not be prepared to field, landing you a better deal. Contact us today to schedule your free roof replacement estimate.