Sell house with or without upgrading roof and AC?
 

I'm about to sell a 20-year-old Patio Villa that has not had its roof or AC replaced although both are functional. My goal is to get as much out of the house as possible.

Should I (1) Sell the house at a low price in recognition that the buyer will need to replace both? or, (2) go through the hassle and time to spend $20-25k to replace both before listing it?

Or, put another way, will the demand for (1) be so low that I shouldn't waste my time?

Asking here instead of a Realtor as I'm considering FSBO.

Thanks! Mike

Most real estate agents advise replacing the roof, because nobody wants to buy a house with an old roof.

But, I look at it differently. If a roof is 20 years old I would be worried that it is damaged even though the seller says its functional. I also would also be worried that the sheathing underneath the roof is damaged. If a seller puts a new roof on a house to sell it, they go to the cheapest roofer they can find and they don't necessarily fix everything that needs to be fixed. So, I'd rather put my own roof on and pay less for the house. But that is just me. Most people don't see it that way. They would rather buy a house with a new roof.

Also, there is a complication which is that a buyer will have trouble insuring the new house unless it has a newer roof. That might necessitate a new roof before closing.

If the roof is 20 years old and the AC is 20 years old, how is the rest of the house. Is there 20 year old carpet and 20-year old appliances, and a 20 year-old bathroom? How is the water heater? It might just be a gut-remodel anyway. If it were me I wouldn't try to fix everything, I would price it attractively.

There are a lot of existing houses for sale in the villages. The market is terrible for sellers. Offering a home as-is at a very low price compared with competition could be a decent strategy. But I am pretty sure not many agree with me.

If it's not broken, don't fix it. Lower the price. Of course any real estate agent will want you to spend money. It's your money, not their's.

You are in a difficult situation down in FL, with a softening marketplace, with current and future comparable houses for sale.

Jim Howard presents both sides of your situation very well. . .

The question is how long do you want to wait to sell the house?

If you want to sell the house quickly, then updating everything and selling it as the lowest priced house against the comparables is the way to go. . . the house will appeal to more buyers. Otherwise, you are waiting to find more of a flipper buyer and he/she will want to low ball you on the price as his profit will depend on how low of a price you will go. ie you are appealing to many fewer less buyers, and will probably wait longer for that higher priced flipper, more price sensitive buyer.

In prepping our current new england 20 year old house for sale, we are doing all the "modernization" spending prior to sale, knowing that it won't increase the price against the comparables for sale, but it will attract more buyers who want a fully functional house being move in ready for worry free living, therefore a quicker sale. Just signed a contract for a new roof, 50 year warranty shingles, for $9,000, kitchen appliance upgrade is done at $5K. However oil furnaces are now prohibited for new builds, so a new oil furnace replacement is $25,000 plus . . . only electrical heating is now allowed. . we haven't decided on what to do with the oil heating system which is still functional.

we feel your pain. . i would go with the upgrade for a larger pool of available buyers who are willing to move in as a retired couple looking for worry free house. . and not attract flippers who will low ball you for more profit for them. .

good luck

The home inspection will note these issues so you will have to negotiate a price adjustment. No idea how insurance companies will insure for a roof that old.

A buyer will question how much more deferred maintenance there is.

We sold a home about a year ago. It was 14 years old. Hvac was still fine and so was the roof. But our realtor advised us to put on a new roof.
She said some people won't even look at a home with an older roof in TV. The way we looked at it, we could either put one on or negotiate it with a buyer. So we put one on.

On a 20 year old home a buyer is going to want both things replaced. So for me, I would just bite the bullet so you can list it with new roof and hvac.

It's a buyers market now, so every little bit helps, imo.

Insurance companies typically do not write policies for homes with roofs that are more than 15 years old. That you will have to do.

I would lower the price, and sell as is..

New roof, make sure it's clean and price it right. It will sell faster than those high priced homes. If you are in the Sumter Landing area, all the better.

Items outside of useful life will likely require a price adjustment or be fixed,

The life of a roof depends on local weather conditions, building and design, material quality, and adequate maintenance. Hot climates drastically reduce asphalt shingle life. Roofs in areas that experience severe weather, such as hail, tornadoes and/or hurricanes may also experience a shorter-than-normal lifespan overall or may incur isolated damage that requires repair in order to ensure the service life of the surrounding roofing materials.
ROOFING
YEARS
Aluminum Coating
2 to 6
Asbestos Shakes
30 to 50+
Asphalt Shingles (3-tab)
10 to 12
Asphalt (architectural) 15 to 20

InterNACHI's Estimated Life Expectancy Chart for Florida Homes

I would like to know how got insurance with old roof? was it rental? Only one house in my 84 lot villas that has old roof and it’s rental.

There was nothing wrong with my 3 tab roof that 20 years old. Sure little sand in gutters and few lifting areas, but no leaks and looked good. Had several roof inspections, honest ones said looks good expect 5 or more years, the roof scammers said needs replaced asap. I had to replace perfectly serviceable roof to get insurance due to all scams. I found that weather in central Florida not nearly as bad as say Oklahoma where it really get hot, windy, and hail size of base balls. Normal windy day Oklahoma would be considered tropical storm day down here. I have also found that Florida full of scam artist.

I find that web site outrageous inaccurate.

Roof
 

This ^^^ Tough market right now, If you replace both and add it to your price you will end up lowering the price to sell and be back where you started. Plus someone might pay cash and not worry about insurance.

You may not be able to close without the new roof on the villa since the purchasers won't be able to secure insurance. Just replace it with a decent shingle selection and don't forget to line up your closing company, (attorney based), in advance if you are selling it yourself. The closing company will provide offer to purchase forms if you need them.

We recently purchased a patio villa. The owner had to put a new roof on it or we would not have been able to insure or finance it. We had other offers fall through for this reason.

Did they put on a new cheap or quality roof? Was the warrenty transferrable to you, the new owners? If so, did you do the paperwork for the transfer?

We approved the roofer, the warranty was transferable, we have the paper work. Actually, we did have an offer on another house where they would not let us approve the roofer so that deal fell through.

This must be a FL thing. I do get people can't insure an older roof cause the corrupt insurance companies play that game. I've bought and sold many houses. Both buying and selling as long as the house (including roof and mechanicals) passed inspection it didn't matter how old they were.

The last two houses I sold, the realtor was pushing for replacing the windows in one house and the roof on another. I declined. I got asking for both houses in a reasonable amount of time. Remember, the realtor wants you to make their job as easy as possible on your dime.

I mean honestly if the market required me to replace anything (roof or A/C or whatever) it's going to be the cheapest bare minimum POS I can find to meet the minimum requirements.

My favorite to buy. Sweat equity is worth a lot of cash. Buy low, put in the work. Reap the rewards.

Yes, most of the value of the house is in its location etc. usually. But insurance is important especially with our hurricanes.

How many PVs are on the market built less than 10 years ago for the same $$$$ you want? If the answer is less than 20 you should sell, more than 300 not a chance. Truthfully I wouldn’t Reno a PV, I would buy newer

Also, people from up north may not have roof age on their radar as much as actual villagers and you will not get a full return on your investment anyhow.

We bought in 2021’. I wouldn’t even look at a house with a roof older than 5 years. The AC unit was 18 years old at the time of our purchase but still going strong.

My friend bought his home a year ago and his AC just tied up and needs replacing.

Due to age of our unit (now22 years) I’m thinking of preemptively replacing it in the fall.

I can’t imagine what we would do if ours crashed in this heat! Their AC guy has replacement wait of 1 month out.

You'd improvise and adapt. You'd buy a portable unit, shut bedroom doors to non essential rooms and just plug away.

Time to visit relatives/friends preferably up north. Take a vacation, etc. Don’t take chances with your health - if it should happen.

True, my northern home has a 25 year old roof and still going strong. It never occurred to me to ask about my TV home’s roof. And it was a TV insurance agent who arranged my insurance so I still was unaware of the importance of the roof.

If you're going to do it in the near future, do it in 2025 before the $2000 tax credit expires. Or so an HVAC guy told me last month.

So, you are living happily in a house with an old roof and HVAC system and, because a real estate agent pushes you to upgrade, you spend tens of thousands of dollars so they can more easily sell your house, you fall for it? No way. I would tell that agent to take a hike.

I actually knew one seller who replaced perfectly good laminate countertops with granite because their sales agent told them to do it.

Right, that up to $2,000 federal tax credit only applies to the higher efficiency systems such as heat pumps and ends in 2025.

The OP didn't state he is currently living in the house, no realtor is pushing him for anything and he wants to do a FSBO. Geez..

I would never, for all the homes we bought and sold, stick a buyer with the worst roofing product I could find to save some nickels. If you've maintained the PV property with terminite/bug contracts, it's clean and in a nice neighborhood with an adequate new roof and have it reasonably priced, it will sell. If it smells, it will be with you for a long time. We would only buy an older patio villa north of 466A for upgrading or investment purposes.

Chances are that there are some tax advantages to sell it as is and negotiate with the buyer to an appropriate price. The buyer will probably save a little on property taxes because of the lower sale price. You may save a little in capital gains if that comes into play. Also, I believe that some of the sale transaction fees are based on price.

one last item to add to the list of differing opinions:

Roof replacement is considered a capital upgrade, so the cost of the roof can be added to the cost of the house when calculating any capital gains taxes. This aspect is important if the house is NOT your primary residence, or wasn't your primary residence at some point in the last 5 years, or if the size of your gain is larger than the exclusion on your one time primary residence.

There is some terminology / interpretation issues with the answers on the web. . .

The words are "not tax deductible, but can be added to the cost basis of the house."
The correct interpretation of this phrase is that the cost of a new roof does not go against your income, but does go against the capital gains, if any, of the house.

This might be overlooked, uncertain as to the tax situation of your house.

If you sell as is, you may be limiting your buyer pool to cash offers only. . . therefore the sale of your house might take longer, as those with a mortgage will either pass, or want to negotiate down the cost of a new roof. That is fine if you price the house as if the house has a new roof, but if you price the house as needing a new roof, then you have to forgo most if not all non cash offers.

good luck, its a jungle out there.

You are correct that I should have addressed what the OP said. But some posters have alluded to agents who push for upgrades. These agents are trying to benefit themselves, not their client. In my opinion, spending $20K plus on an old patio villa is not money well spent.

We bought a house few months ago that had a 16 year old roof, but new HVAC. We did offer quite a bit under asking to compensate for the replacement and other necessary upgrades. We were still able to get insurance for the 16 year old roof, but it did cost more. We decided to replace the roof a month or so after buying, however. We probably wouldn’t have considered the house if it didn't have the amazing views it has! In a way I am glad we offered less and did the roof ourselves because we were able to ensure it wasn't done cheaply and we were able to get the shingles and color we wanted.

We are currently house shopping and one of the first things I check when considering a house is the age of the roof. I wouldn’t even look at your house with a 20 year old roof. My opinion then is replace the roof and HVAC, and then your house would be moved way higher on my list.

If I was a buyer in the market for a patio villa with so many on the market I would either be ready to pay a little more for those major items to be taken care of or looking at yours as a deal. It better be priced accordingly. There isn’t much that differentiates one patio villa from another, in your case it would have to be price.

But will you pay the extra $20K to $25K for the cost of the upgrades? Some buyers are looking for a lower priced house. It only takes one buyer to make the sale work.

House upgrades presale
 

Former house flipper here. From 2004 to 2021 I bought and sold 20 houses.
I would pay for a home appraisal to determine fair market value "as-is-where-is."
This will establish a base value. Now you negotiate. If a potential buyer is concerned about the roof, consider a buyers allowance for them to get it done. Your appraisal should tell you the remaining useful life for roof, A/C and appliances. If you are a not a good negotiator, hire a real estate agent. Houses listed/sold by agents almost always sell for more than a FSBO. I have sold both ways, using a pro is better.

The issue is that unless the buyer is a cash buyer they cannot get insurance or financing if the roof is over 15 years old. We had an offer on a house and it fell through for this very reason. Your pool of buyers is then very limited.

Another point of view is, when you look at a house, if the roof and or HVAC was just replaced, chances are they installed the cheapest to get the house sold. But if both are a couple of years old, chances are the homeowners did a quality replacement because at the time they weren't considering selling and were planning on living there.

I will also say, many here in the Villages feel their home is worth more than it actually is and if it's been well maintained, they want "top dollar". There is no way you are going to get "top dollar" for your home with a roof or HVAC system that only has a year or two of life left.