The roof on Rental #1 is quickly becoming a big problem. Got this email from my agent today:
Termite damage under the house to the supporting rafters. Around $2600 to repair/replace, buyer has enough to do this himself. Roof has 3 layers on it. Original layer is wood shingles, two are composition shingles.
Inspector did notice some shingles missing on one side of house, suggested we try to get insurance claim as you know. He informed the buyer that he should get a bid on roof due to fact this could create some problems in future and insurance coverage could be one of those problems. We have sent two roofing companies we use out to get estimates, both have come back with the comments that the roof is not showing any leakage nor missing enough shingles and their thoughts are the insurance will probably reject any claim. The roof is still a problem. It does have some areas that are caving due to the weight of the layers and the fact that wood shingles are attached to the rafters, not to deckboard, so adding the age of original roof and the 2 layers of composition shingles, this is why the sagging is occurring.
This is creating a new problem for the buyer. He will have trouble getting insured and he does not have enough money to cover the problems underneath the house and the roof, which is going to run around $7,000-$8,000 to tear out completely and replace properly. He was told this by a roofer he called out and was confirmed by our two roofers.
I do want to get out of this house and now I am facing the prospect that insurance may not cover the repairs. Looks like the buyer and I will be going back to the negotiating table soon.
3 comments:
I'm not sure how directly you can talk to your buyer (real estate agents and all that) but he/she/they should talk to their current car insurance company. When I bought my house it needed a new roof and I got turned down by the first six or eight companies I called until I called Allstate who was then my car insurance company. They said since I was a current customer that they would write the insurance and then (after I bought the house) come check the roof and if they didn't like the look of it they'd give me six months to fix it. That was fine with me since I planned to do it fairly quickly after buying the house.
I had the roof replaced within four months, and they never did come look at it. I've been happy with Allstate, but I've never had a homeowner's claim, just a car insurance claim which they handled quickly and easily.
Who inspected this property when you bought it and didn't catch the three layer roof? Where was the termite inspector?
Your buyer is an investor looking to flip the property or rent it out. Their only concern is making the numbers work. If they have any experience, they probably saw the roof had a problem. They may not have seen the third layer, although they probably saw the sagging. They want to see what you will do, now that you are aware of the problem.
To get out from under the property, try to figure out the minimum credit they will accept for the roof. I might offer a $2,000 credit towards the roof repair and see if they take it. You should at least be able to flush out a counter offer, because this investor wants the house.
Understand that you will not sell this house in a financed transaction. It won't meet FHA/VA standards. If your buyer walks, you will have to wait for another investor. Every day the house sits vacant is another day it could be stripped and/or vandalized. In your shoes, I would dump the house and move on.
Actually, contrary to what we expected, all the people who have expressed an interest in the house are owner-occupants and the current person I am in contract with will be occupying the house. They are buying it all cash, with assistance from their out-of-state parents. I'll have to go back through my records and look for an old inspection report. I don't have time to do that now, but I had wondered the same thing. I'm in the process of negotiating the roof right now. I don't think we've heard back from my insurance yet on whether or not they will fix it and that will have some bearing on costs.
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