Why Negotiate a Roof Replacement When Buying a Home

No home is perfect and chances are the house you plan to make an offer on will have a few problems. However, a roof in disrepair is more than just a minor inconvenience. Luckily, roof problems don’t mean you have to give up on buying your dream home. Here’s what you should know about negotiating a roof replacement from the sellers.

3 reasons to negotiate a roof replacement from the sellers

There are a few reasons to negotiate a roof replacement when placing an offer on a home. To start, it won’t significantly impact the appraisal of the home, so there’s no harm in trying to negotiate. You’ll also want to consider how an old roof can affect your ability to secure homeowner’s insurance and financing.

Reason One

You’ll Need a New Roof to Secure Homeowner’s Insurance

In most cases, in order to secure homeowner’s insurance on your home, you will need to have a roof that is in good condition already on the home. If the home already has a relatively new roof this won’t be a problem. However, if the roof is nearing time for replacement it may be difficult to secure homeowner’s insurance. If you are unable to secure homeowner’s insurance you will not be able to secure a mortgage as insurance is a stipulation of the financing going through. Consider the home you are hoping to purchase. If the roof is over 15 years old it is unlikely you will be able to secure homeowner’s insurance without a replacement.

Reason Two

A New Roof Won’t Significantly Affect the Value (or Appraisal) of the Home

Buyers may be wary of having a new roof installed on the home because of its potential affect on appraisal. While an old roof can negatively affect the home’s effective age which is used to determine how much the home appraises for, the opposite isn’t also true. If you do have a new roof installed on the home it will not significantly change the appraisal value because the new roof is simply a part of normal home maintenance. A home needs a roof that is in good condition to be a safe structure. Features such as built-in appliances, an in-ground pool, and a stellar location are more in line with what will result in a higher appraisal. This means that, as a buyer, you actually spend less if the seller performs the roof replacement. This is because, if you purchase the home and conduct the roof replacement yourself, you are sinking money into your home that does not effectively raise the home’s value.

Reason Three

Your Lender May Not Approve a Mortgage on a Home in Need of Critical Roof Repairs or Replacement

If the home you’re looking to purchase has major deferred maintenance, such as a roof in need of replacement, it is unlikely the mortgage will be green-lit. Lenders are picky about things such as a roof in irrepair because each mortgage they offer is a calculated investment. If you default on the loan they want to ensure the costs can be recouped. Their requirements can also prevent homebuyers from ending up with a home that they’ve paid way too much for. If you are trying to purchase a home with an FHA, VA, or USDA loan type then you will have additional property standards you must meet. While conventional loans are more lenient, it is still unlikely to be approved for a home that is in need of critical roof repairs or replacement. You can use this as leverage during negotiations as any homebuyer who is financing the home will be experiencing this same issue.

Consider including a clause for buyer and seller to agree on the contractor

To avoid the seller going with the cheapest (and potentially worst) roofing contractor available, you should consider including a clause in the agreement that requires both buyer and seller to agree on the contractor used for the roof replacement. This will give you a say and potentially give you the option to select the roofing contractor of your choice. Remember, a roof that is correctly installed will likely be on your home for at least 15 years. You don’t want to be stuck with a poorly installed roof as this will only lead to more repairs and potentially a roof replacement much early than you expected.