Should I Replace the Roof Before Selling

Several days ago I was asked my opinion by a potential seller on whether they should replace their roof which is 17 years old (and showing signs of wear) or offer a monetary incentive.

These are my thoughts:

• Many roofs are "rated" for 20 years but find out what type and life span the builder/roofing company used. If your roof is structurally sound, cleaning and debris removal may be all that's needed.
• Most buyers will conduct a general building inspection at which the roof condition will be reviewed. If there are findings concerning the roof, the buyer has the opportunity to request the seller make corrections. However, the seller is under no obligation to comply with a buyer's request but may negotiate the outcome with the buyer.
• Unless the buyer is making a cash offer, there will be an appraisal in which an appraiser will visit the property.
• Regardless of the age, the appraiser will visually inspect the roof. If there's any doubt the appraiser may require a five year roof certification or replacement (non-negotiable because the property is collateral for the mortgage).
• If the appraiser calls for a new roof, it must be installed for the transaction to close. If the seller balks, the buyer will "walk" and get their earnest money back.

Offering a monetary incentive probably won't work in today's markets so I recommend sellers pay for their own pre-listing general building inspection and either correct or disclose the findings before listing. In our markets there's lots of competition out there. For your house to get that offer, it needs to "stand out" from the competition. What better way than to have identified, corrected or disclosed any known problems.

No one likes surprises!

Are You Facing a Short-Sale

A short-sale occurs when a homeowner is unable to make mortgage payments and the institution "holding" the mortgage agrees to a sale in which the purchase price will be less than the outstanding mortgage amount.

A homeowner might ask: "If I'm unable to make my mortgage payments, isn't it just as easy to "walk away" from my house?" The answer is: "yes, it might be" but there are long-term complications that will "follow you" for quite a few years afterwards if that's what the homeowner does.

If you are having difficulty making your mortgage payments when due I recommend a homeowner take the following steps :

• Contact your mortgage company immediately, don't wait until after you've missed a payment
• Do some research to determine your local real estate market condition
• Have a back-up plan in place if you have to move while your house is listed for sale

Your mortgage company may be willing to "work with you" to resolve the situation if you present a reasonable plan to correct the situation. The mortgage company would rather have the income stream from your payments rather than taking over the property on a default. This situation brings out "bottom-feeders" for buyers who only want the best deal possible for vacant properties. If your house must be sold, at least it will be occupied during the listing period.

There's also the possibility that the tax code will be changed so that the "shortage" amount is not considered a taxable event for the homeowner.