Need help with residential real estate sale

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Long story short; my Brother and I are selling our deceased Father's house.

Our agent is pushing us to put a new roof on the house and file an insurance claim for hail damage that is honestly minimal to almost non-existent from a recent storm. We would have to pay a $1,000 deductible to maybe get $1,500 from insurance once they depreciate the roof.

I don't know the exact age on the roof but I am guessing 13-15 years into 20 year shingles. In typical fashion the agent had a 'trusted' contractor look at it, of course he said it needs immediate replacement due to hail damage to the tune of $5,500+ minimum.

Everyone that has seen the house is trying to get a Rural Development loan and is demanding a guarantee of a new roof before they make an offer so the feds will even loan the $$$.

I have my heels dug in due to the current price (way below value) and the time/money we have invested so far (full paint, full carpet/padding, serious cleaning and major yard/landscape overhaul).

I have made our agent the following offers:

1) simply add a 2nd layer of shingles by paying out of pocket and they don't get much wiggle room on price

2) try the insurance route and I want list price if not higher

We aren't in financial need to sell the house and if it doesn't sell it would rent in a HEARTBEAT. We just don't want a rental in this particular town due to inconvenience and this is why we are even trying to sell it instead of adding to our current group of rentals. I am more perturbed that people are making 'demands' of us when they clearly don't have the money to make a solid offer and put a roof on themselves.
 
I don't think they'll depreciate the roof. My aunt's house had hail damage in 2010 and the roof was probably 15 years old, insurance replaced it no problem 100%. It wasn't that bad either...
 
Originally Posted By: Nick1994
I don't think they'll depreciate the roof. My aunt's house had hail damage in 2010 and the roof was probably 15 years old, insurance replaced it no problem 100%. It wasn't that bad either...



Insurance companies are looking at long term profits by paying out these bogus hail claims on old roofs by
atomization.
 
I sold my previous house in Irvine by myself last year, the concrete roof was okay, but there was somewhat extensive termite damage. I told the buyer I would reduce the estimate repair from the asking price, they agreed but their bank demanded the repair must be done before close escrow.

If the buyer could go through with my proposal they will pay less property tax(about 1% of $14k) every year they own it, when they sell the house they can add the termite repair to their cost to reduce capitol gain.

The benefit of selling the house by yourself is you can negotiate directly with buyer on everything and don't pay 5-6% commission, in my case the commission was about $70k.
 
Contact the insurance company first and have them send out an adjuster. The adjuster/"roof expert" must validate the hail damage and necessity of repair/replacement. The company may come in with an offer to repair selected areas or not at all.

No money flows until that is done. You will also figure out where you stand in relation to the new roof "requirement". Unless the roof has been damaged in the past, you may not get the result from the insurance company you expect.

Adding a second layer on top of one old layer is standard business practice in my area, despite what RE agents or other contractors may tell you or imply.

The tactic to get a new roof before selling the house through the insurance claims process has been around a long time, and insurance companies seem to be getting tougher on what they will pay for, at least in my area.
 
Sounds like you need a new realtor to me-people sell houses "as-is" all the time. When I bought my first house, it needed a roof & gutters BADLY, the seller & I split the cost & worked it out at closing. I would be pretty suspicious of an agent that used his OWN home inspector & roofing company, sounds shady to me.
 
First and foremost, the realtor works for you. They advise but not push.

I would contact the insurance company. I do not think they will depreciate the roof. They can depreciate a TV maybe, because they could buy you a similar used one, but cannot buy you a used roof.

And they actually want the roof repaired. If it leaks and causes interior damage, they will have to pay for that also.
 
What price range is the house in? If its in first time buyers market. Buyers won't be able to afford the new roof. List the house for what you want plus the cost of the new roof. When you receive and offer, negotiate over the roof. You can come down on price if they accept the roof as is , or you will put a new roof on it if they pay your list price with out haggling. They would basically be financing in the new roof in their loan rather than buying the home and shelling out for repairs.
 
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To me, it sounds like your realtor may not be the most ethical of people.

This might not come as a great revelation to you.

Is a private sale remotely feasible?
 
Realtors can be the biggest pita. Why? Because they want that commission asap and don't care about much else. You just have to be firm right back at them.
 
Originally Posted By: hatt
If the price was "way below value" it would already be sold.


+1

If everyone is requesting a new roof, it sounds like it is pretty damaged. If the insurance is in your Father's name or a trust, why not file a claim if it was legitimately damaged? It's not like you have to worry about increased premiums.
 
this comment says it all:

"Everyone that has seen the house is trying to get a Rural Development loan and is demanding a guarantee of a new roof before they make an offer so the feds will even loan the $$$"

So your saying no one can get a loan without a new roof. If that's the case, why are you even discussing this, get the roof done. Just don't use the realtors guy until you see more quotes.
 
This is very common these days, government loans to put it bluntly suck and have all sorts of strings attached. VA are my least favorite.

A lot of insurance companies are big on roofs now as well, so the new buyer may be hearing it from them as well.

I'd put a roof on it, and be done with it.

It sounds like its not a very expensive house and when your selling them the typical buyer has NO money what so ever. Most get into them for near free with those FHA, VA, Rural farm loans. So a $5k roof bill will sink them.
 
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Originally Posted By: bullwinkle
Sounds like you need a new realtor to me-people sell houses "as-is" all the time. When I bought my first house, it needed a roof & gutters BADLY, the seller & I split the cost & worked it out at closing. I would be pretty suspicious of an agent that used his OWN home inspector & roofing company, sounds shady to me.
NO chance of a little kick back scheme going on here, oh no.
 
Quote:
1) simply add a 2nd layer of shingles by paying out of pocket and they don't get much wiggle room on price

2) try the insurance route and I want list price if not higher


Route 2 definitely. Generally they will replace the roof in full if it is damaged and over the half-life of the shingle's original specifications.

IMO adding a second layer is not the best idea. Shingle companies will not warranty installed shingles if they are installed over existing shingles. The best route is to have it done correctly. Strip the entire roof and replace with new felt paper and shingles. If these people are getting Gov't loans you will want to be sure that the repair meets USDA standards. A second layer over existing old shingles may not meet their criteria.

Also when getting quotes see if the contractor will match the price of installing 3-tabs with the designer pro-30s. My father owns a contracting company and he and his men install designers at the same price point as 3-tabs as they lay down much faster saving labor cost over the 3-tabs. The designer shingles are a lot less hassle to install.

designers also make the home look better, which will aid in your quest for a sale.
 
This brings back dozens of memories of pain in the [censored] clients.

Every seller thinks his property is listed below market. You know a property is below market when the listing broker buys it and it never hits the market. You know it's listed at the low end of the market when it's listed and you get multiple full price offers within 24 hours. Believing your property is listed below "value" under any other circumstances is fantasy land.

You will never get top price for a property that requires repairs. This is especially true of homes that can be classified as "starters". People who buy starter homes are typically stretching to qualify and come up with a down payment and they don't have any extra money to fix anything. A 24 year old wife doesn't want a house with a bad roof or any other problems.

THE MARKET DETERMINES THE VALUE, NOT THE OWNER OR THE REALTOR. If you do not get multiple full price offers right away, the property is not listed below value.

Your opinion is almost always not the opinion of the market. YOU might think putting a second layer of singles is a good enough band-aid, but I guarantee most prospective buyers won't like the idea of a 30 year mortgage on a quick half assed fix.

If you want a property to sell, fix all of the material issues and look up the definition of material if you need to. Or, get three estimates to fix all the problems and be prepared to credit the buyer at closing or leave the money in escrow to be paid to a contractor to fix the issues if the lender will allow.

In general, get your head out of your [censored]. You're not going to get more than market value for any property and believing people will pay above market will wind up costing you money in the long run.

I can't tell you how many clients have told me, "I think I'll wait until my apartment building will go from $1 to $1.1 million before I put it on the market."

Really? That sounds real smart. "What will you do with the money?" I plan to buy a $2 million apartment building in a better neighborhood."

"That's brilliant. Except, if you believe your building will increase 10% in value what on earth allows you to believe that $2 million property in a BETTER neighborhood won't appreciate at least 10% during the same time? You can wait to make an extra $100,000 and wind up spending an extra $200,000 on the new property.

I've met hundreds of people who thought they could save money by doing a FSBO. There are multiple problems with For Sale By Owners:

1. FSBOs are primary targets for bottom feeders and scam artists. They know the seller is probably ignorant of the market, sales contracts, legal requirements and everything else connected with the sale.

2. FSBOs typically believe the Federal and State laws governing real estate transactions only apply to broker deals. Wrong. Here's a good example. Do some research on the seller liability if the federal requirement Lead Based Paint Disclosure isn't completed 100% accurately and delivered to the buyer with the time frame required and isn't signed off by the buyer as required by law. Do it wrong and you could find yourself being sued 20 years from now as well as being prosecuted by the feds.

Don't forget things like local ordinances, flood disclosure, various hazard disclosures, etc. Try this quiz. If you know there's a convicted child molester living next door, do you have a legal requirement to disclose this information to a potential buyer? If you don't what's your liability if any?

What's your liability, if any, if you mention what kind of people live in the neighborhood.

If a person died in the property, do you have a duty to disclose that fact to a potential buyer? Does it make a difference if that person died of HIV?

If you put "AS IS" in four inch high letters in the sales contract, do you still have a legal requirement to disclose all known defects?

What's you legal exposure if you put a FOR SALE sign on your property and don't show the property to someone who sounds "poor" on the phone or talks in ghetto slang or sounds like a Mexican drug cartel member?

3. Like a few posters in this thread, FSBOs think they can save the commission. 98% of the time they don't. Why? BECAUSE THERE'S ONLY ONE COMMISSION. The FSBO wants it, so he puts his $100,000 home on the market for $100,000 along with all the other $100,000 homes listed by Realtors. He forgets that listed $100,000 homes net the seller $94,000 after a 6% commission and a buyer would have to be an idiot to offer over $94,000 knowing the seller ain't paying a commission.

4. There are a lot of ways to screw up a real estate deal, lose a pile of money and expose yourself to a bunch of liability. If you hire a broker, he or she becomes responsible for a lot of that. 6% is cheap insurance if you stand to lose a huge pile of money through ignorance and arrogance.

5. The best deals I've ever made for myself were FSBOs.

6. I hired a local broker represent me and made sure she got her full commission when I moved to a new state even though I had 30 years experience in residential and commercial sales, development and investment. Why did I do that? You'd think I'd be qualified to represent myself after representing hundreds of clients in over $500 million dollars worth of transactions, building and selling a few homes and apartment buildings, appearing as an expert witness in superior court, owning a mortgage business, etc., etc.?

8. I represented the seller of an apartment complex who put up for sale by himself for $10 million when brokers told him it was worth $9 million. After a year, he lowered the price to $9 million but the market had gone down to $8 million. He continued this for two more years and then I finally listed it and sold it a then market correct $6 million. If he had listened to the stupid, rip off brokers who told him his building as worth $9 million three and a half years earlier he would have netted an extra $3 million.


God, I love FSBOs.

Good luck with your sale. Just promise me you'll post the true story when you screw up, watch the deal go sideways and lose a bunch of money. I need the laughs.
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Sonicmustang: I agree with much of what you say, especially if a bad market. Right now though, the market in my area is smoking and homes are going in 1-2 days. I think FSBO’s have a place in these kinds of markets. I myself would probably not do a FSBO though as I find dealing with RE too stressful to handle along with a full time job.

Your comments on over-valuing a property are spot on. I have seen seller’s basically follow a falling market for years, eventually giving on selling or selling much lower than they should have. I have seen others where they had to hold for years while the market finally caught up to their valuation. In any market, if a property is priced right, it sells.
 
I will comment though that like most realtors, you sound quite arrogant. My experience has been that they only care about the sale and NEVER the final selling price. I have sold a few homes in my day and I have never felt "good" about the realtor when I was done. Not every FSBO is what you say.
 
Homes are getting contracts in 1-2 days because you have every agent in the area, along with 90% of the buyers they represent, selling each home. Your FSBO has no one except people driving around looking for deals. The serious home buyers go where 90% of the houses are listed for sale.
 
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