Looking for some thoughts on negotiating repairs with seller. Here's my scenario:

My wife and I are under contract on a home. We had a home inspection and separate HVAC inspection done last week. The inspections found that a new roof was needed, and that the AC refrigant was 2-3 LBS low indicating a leak somewhere. Furthermore, the HVAC tech said that the AC unit is undersized for the home. The home is 2,262 sq. ft. The current unit is a 3.5 ton unit. He recommended a 5 ton unit for the size of the home. The roof and the HVAC are original to the house (23 years old), and the roof has evidence of hail damage and uneven rafters.

The sellers have agreed to replace the roof, but they want to raise the sales price $3,000. They did not agree to any of our other requests (remorter some brick around the lentil of the garage opening and fix a bedroom window track).

I'm not cool with raising the sales price because of the roof. We already increased our offer early on when another buyer showed interest, and our offer was contingent on a satisfactory inspection. Apparently that other buyer ended up being very shady, because the sellers agent said the seller wanted nothing to do with them after they were under contract. Our offer ended up being accepted as a backup when the first one fell through.

That said, what would you do? I am aware we could lose the house if we don't agree to their new sales price. However, I'm not sure that the seller is going to want to start over and relist the property.

Do you know the sellers financial situation?

In all honesty, we won't make any repairs any buyer comes back with unless we raise the price. This is for a few reasons. 1, we bought at the height of the market, and are selling in one of the lowest points after 5 years. And 2, we are paying rent and a mortgage.

Either way you slice it, we don't have liquid capital to make repairs, and they would need to be paid at close; but the way our mortgage and the market are, we are listing as buyer friendly as possible without having to bring money to close or short sale.

Could be similar, but honestly, if I was the seller in that situation, I would have to just start over.

Different scenario, but... we asked for some smallish repairs, they offered lump sum cash. After seeing the invoices for work performed, we should have taken the cash.

The only thing I know is that the sellers have been in the house for 20ish years. They are sentimentally attached to the home. When I met them at the inspection they said that they screened us on Facebook and really liked us. They are moving to another home about 5 miles away in the next week or so that they had built.

I'm fully aware old appliances beyond there rated lives are likely to fail. That said, I have no way to tell if the refrigerant loss is due to a large leak or small leak.

Sasappis said:

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Sounds like they are offering to split the cost of the new roof with you. That seems reasonable.

The a.c. is something you should have been aware of when you made the offer. A 23 year old unit can fail at anytime so you knew that risk.

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A leaking AC unit to me is already failing, especially if it's an old Freon unit.

To the OP, you won't be able to recharge it soon and it will already be very expensive just for a few pounds of refrigerant. You will likely need to replace the entire unit soon regardless of whether it is undersized, so factor that into your negotiations as well.

Agreed. Two pounds of R-22 will probably run about $160. By beginning of summer, it may require 4 LBS or more. We are getting a one year home warranty with the sale (seller paid), but I know better than to assume they're going to be easy to work with or that they'll be anxious to replace the HVAC unit for us. Do you think the condition of the HVAC unit gives us the leverage to haggle over the extra $3000 they are wanting?

I would say the roof should be their responsibility. If it is that old and has damage there is a chance your insurance would not even insure it. You might ask your insurance to confirm they would cover it.

The ac, on the other hand, kind of is what it is. Replacement is pretty much an upgrade. You need to be prepared to do it as needed.

Replacing an AC unit for the purpose of increasing the tonnage would be on the buyer as an upgrade. The home has already done alright on the current unit for a couple decades, yes?

Replacing the AC unit because it has leaks and will likely continue to have them and not be serviceable is the seller's responsibility to have systems in good working order.

Offering a home warranty is one avenue the seller might try, but those are a PITA. Another avenue the seller might try is to have his own AC guy do a patch job and fill it up. Do not accept that one!

My advice: price out a new system at the recommended tonnage (preferrably more than one quote and opinion) and see if the seller will go halfsies.


Edit: Seller might try to offer home warranty with patch job so that you can claim that system is in good working order.

I think you have to look at the value of the home now versus the value of the home with the repairs. While some things don't change the value, a new roof and new A/C may change the value of the home and the sellers can demand to be compensated for that new value.

couple thoughts, did the AC guy take all the measurements to determine what size AC? Our old house was the same size and our AC people recommended going down to a 4 ton from a 5 ton. As far as negotiating, it depends on how they priced it initially. We are in the same boat with selling my parent's house. The AC is 24 years old and the roof may need repairs or replacement. Rather than negotiating after, they priced the home with that in mind. If a buyer tried to negotiate it, they wouldn't be open to negotiate much

Yes, the current 3.5 ton has worked for several decades. I'm not as worried about capacity, as I am the state of the current system.

I don't think the extra $3,000 at closing is going to break the deal for myself or the seller. However, it's the principal of me being charged for half a roof that should have been replaced already. And as one poster said, my insurance was not going to insure the home based on the current condition of the roof in the first place.

Could a reasonable person see that the AC was a dinosaur before putting in their offer? Old homes come with old stuff. That's why they're priced where they are and why new homes cost more.

Let me guess, the AC inspector also gave you a quote to replace? Huge conflict of interest with those guys. I've never seen one look at a unit that was more than 8-10 years old and not come up with a reason it needs to be replaced. Units could be working fine for years and AC inspector looks at it and all of a sudden its on the edge of meltdown. Every single time. They scare buyers in hopes of getting the business, not caring that their tactic might cause a huge mess for a lot of people. Should be illegal for them to provide the inspection and do the work.

aggie_2010 said:

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The roof and the HVAC are original to the house (23 years old), and the roof has evidence of hail damage and uneven rafters.

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Are they replacing the roof or are they getting insurance to replace?

Are they obligated to tell me if they pay out of pocket, or if insurance is covering it? Assuming they have the home insured (I'm sure they do), my guess is that the hail damage is enough that any adjuster would agree that it needs replacing.

Side note: I was at the house yesterday, and the roof was full of chalk circles and marks on the shingles that appear to be from a contractor identifying damaged areas.

aggie_2010 said:

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Are they obligated to tell me if they pay out of pocket, or if insurance is covering it? Assuming they have the home insured (I'm sure they do), my guess is that the hail damage is enough that any adjuster would agree that it needs replacing.

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Your insurance person should be able to see if a claim was made. If it is a claim, the $3000 may be the deductible amount. We redid our roof with an insurance claim and the deductible was 1% of insured value

In Texas, they are required to disclosure any insurance payments that they received and did not make the repair.

Chalk marks likely from insurance adjuster. Did the Seller's disclose the receipt of any insurance proceeds on the roof for repairs that were never done? If not, good chance Seller can get roof replaced under HO policy and which likely has 1% deductible. The insurance company may research hail history in your area before they agree to cover. You could offer to split any deductible payment. On the AC unit, I agree that it is going out. It will need to be replaced and can be costly these days. I would make sure I'm comfortable with the final numbers knowing that I'm going to be replacing that unit very soon.

Home is in Arkansas.

I feel our offer is fair. I really like this house, but I'm willing to walk if I can't get it for the price we want.

Kenneth_2003 said:

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Absolute said:

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I would say the roof should be their responsibility. If it is that old and has damage there is a chance your insurance would not even insure it. You might ask your insurance to confirm they would cover it.

The ac, on the other hand, kind of is what it is. Replacement is pretty much an upgrade. You need to be prepared to do it as needed.

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As a current seller... If you ask me to replace the AC, I'm installing the cheapest, lowest efficiency unit I can find that satisfies the agreement. I no longer care about long term cost of maintenance or operation. Same goes for the roof. I'm going to find the cheapest 30 yr shingles I can find and have them installed.

If they offer cash instead, take it and do the repairs to your specifications.

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In general I agree. Seller has no incentive to spend money.

As a home inspector I see this all the time. IF the AC works, old is not really negotiable, imo. Having the specialist tell you it needs updating is not surprising, but still doesn't make it negotiable to me. As someone said, old is worked into the price in theory.

Roof is a little different since insurance is involved, both the seller's old policy and the buyer's upcoming new policy. If the seller has made a claim and not replaced the roof that is their bad and they need to eat it now. If they have not made a claim and still can make one via their insurance, that is the most common sense and reasonable way to get it replaced. Insurance will pay for the same quality replacement and the buyer can also specify such in the addendum. Insurance for the buyer may very well write a policy, then come back and say the damage was before their policy was in force and they won't cover the roof. Then rub salt in the wound by requiring that the new homeowner replace it immediately out of pocket to maintain insurance and therefore a mortgage. Personally, I would not agree to cover the seller's deductible as a buyer. Particularly when there is a pretty good chance they don't even pay it to the roofer.

I have seen sellers insist that a roof is perfectly fine after I said it was trashed and multiple roofers confirm and the buyer's insurance says they won't write a policy due to the roof. Rational common sense is not a given.

Bingo! These are our feelings about the roof, and why they should cover the expense.

Absolute said:

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Kenneth_2003 said:

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Absolute said:

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I would say the roof should be their responsibility. If it is that old and has damage there is a chance your insurance would not even insure it. You might ask your insurance to confirm they would cover it.

The ac, on the other hand, kind of is what it is. Replacement is pretty much an upgrade. You need to be prepared to do it as needed.

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As a current seller... If you ask me to replace the AC, I'm installing the cheapest, lowest efficiency unit I can find that satisfies the agreement. I no longer care about long term cost of maintenance or operation. Same goes for the roof. I'm going to find the cheapest 30 yr shingles I can find and have them installed.

If they offer cash instead, take it and do the repairs to your specifications.

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In general I agree. Seller has no incentive to spend money.

As a home inspector I see this all the time. IF the AC works, old is not really negotiable, imo. Having the specialist tell you it needs updating is not surprising, but still doesn't make it negotiable to me. As someone said, old is worked into the price in theory.

Roof is a little different since insurance is involved, both the seller's old policy and the buyer's upcoming new policy. If the seller has made a claim and not replaced the roof that is their bad and they need to eat it now. If they have not made a claim and still can make one via their insurance, that is the most common sense and reasonable way to get it replaced. Insurance will pay for the same quality replacement and the buyer can also specify such in the addendum. Insurance for the buyer may very well write a policy, then come back and say the damage was before their policy was in force and they won't cover the roof. Then rub salt in the wound by requiring that the new homeowner replace it immediately out of pocket to maintain insurance and therefore a mortgage. Personally, I would not agree to cover the seller's deductible as a buyer. Particularly when there is a pretty good chance they don't even pay it to the roofer.

I have seen sellers insist that a roof is perfectly fine after I said it was trashed and multiple roofers confirm and the buyer's insurance says they won't write a policy due to the roof. Rational common sense is not a given.

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Having gone through AC replacement on my home shortly after buying it, the part that stands out to me is the leak...of Freon. It doesn't sound like it's just an old unit that's humming away perfectly fine.

Harder call on the information provided. Did the AC work / cool within typical differentials? Since I am not an HVAC guy, I don't check freon levels. So don't really have a reference point. Given the age and the noted issue, it is reasonable to assume it will die sooner rather than later. That would be reasonable even if it checked out perfectly. But neither make it a slam dunk for negotiating replacement completely on the seller.

I realize it may not seem exactly consistent, but the AC falls into a little different category. The unit could be repaired. The leak can be found and the freon replaced. It is harder to get those negotiated for replacement. HVAC tends to fall more under the agree on some sum to split the cost. Best case, a couple HVAC contractors agree that it is beyond repair and needs to be replaced. Helps if the heat exchanger has a crack, since that is not reasonably repairable.

The old HVAC and water heater tank issue comes up a lot. I always point it out to my clients one way or the other. If they are just old and working, I explain that situation and that they should plan to have to replace them on their dime. I tell many that they should replace really old water heater tanks proactively upon taking ownership if they are in interior locations. Fortunately, or maybe unfortunately, the home warranty idea is primarily designed to resolve/mask the HVAC issue when it comes up. It will theoretically keep is limping along. So I tell people, make a plan. If possible plan a proactive replacement of the old HVAC or replace them completely when they do fail. If that is not financially feasible, keep the HW, but realize is not ideal.

If it is old and not working, make a plan and negotiate fairly. But realize, depending on the market conditions, a compromise will most likely be necessary.

It is important for buyers to understand that when they buy an old home (basically anything 5 years of older) they step into the middle of service life cycles of everything. Things will fail and need to be replaced. It is impossible to predict when accurately. The more old components you have, the more you need to plan for replacing. Used is used. New is new. The only reason things like the roof and foundation get different treatment is that outside powers (Insurance companies and Mortgage lenders) are interested in them.

I feel like you have some leverage as a buyer now because they now know that they'll encounter the same issue with other buyers if you walk.

Don't they have to disclose the fact that the roof needs repairs to others now?

We felt the same. Ultimately we got them to agree on $1,500 paid in cash at closing. Not a big win, but we'll benefit from the new roof. Found out that their insurance is covering the roof, so in essence we split the deductible.

About the A/C, if someone replaces it be sure to have a person come out to calculate the actual size needed instead of some nonsense rule of thumb based on square footage. There are a whole lot more factors to take into consideration when you're figuring out how many tons you need.

If it were me, I send my "wish list" of repairs to the seller. If "wish list" contains non-negotiables that they won't repair, I walk. There is ALWAYS (eventually) another house.

Had a similar deal with the HVAC in our home when we bought it. Inspector looked it over and suggested a HVAC company come out. It was also original and 23 years old. HVAC guy said it still technically worked and he couldn't condemn it. Seller paid for home warranty for first year as well, so we ran the hell out of that AC that summer. Broke down 4 times in 6 months, and barely cooled the house enough to be comfortable. We kept hoping the home warranty company would replace it but of course they just kept repairing and repairing. The 4th time it broke down, the guy who came out to fix it gave us an option. He said we could take the $800 credit it would take to fix he HVAC and attribute it to a new system, and if we didn't plan on renewing the home warranty, to call them and tell them to exclude the HVAC on the policy for a credit. The new HVAC would be under manufacturer's warranty anyway, so I called and had the HVAC removed from the home warranty, and they sent me a check for about $700. Not an ideal situation, but saved me about $1,500 on a new system.

Absolute said:

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Kenneth_2003 said:

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Absolute said:

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I would say the roof should be their responsibility. If it is that old and has damage there is a chance your insurance would not even insure it. You might ask your insurance to confirm they would cover it.

The ac, on the other hand, kind of is what it is. Replacement is pretty much an upgrade. You need to be prepared to do it as needed.

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As a current seller... If you ask me to replace the AC, I'm installing the cheapest, lowest efficiency unit I can find that satisfies the agreement. I no longer care about long term cost of maintenance or operation. Same goes for the roof. I'm going to find the cheapest 30 yr shingles I can find and have them installed.

If they offer cash instead, take it and do the repairs to your specifications.

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In general I agree. Seller has no incentive to spend money.

As a home inspector I see this all the time. IF the AC works, old is not really negotiable, imo. Having the specialist tell you it needs updating is not surprising, but still doesn't make it negotiable to me. As someone said, old is worked into the price in theory.

Roof is a little different since insurance is involved, both the seller's old policy and the buyer's upcoming new policy. If the seller has made a claim and not replaced the roof that is their bad and they need to eat it now. If they have not made a claim and still can make one via their insurance, that is the most common sense and reasonable way to get it replaced. Insurance will pay for the same quality replacement and the buyer can also specify such in the addendum. Insurance for the buyer may very well write a policy, then come back and say the damage was before their policy was in force and they won't cover the roof. Then rub salt in the wound by requiring that the new homeowner replace it immediately out of pocket to maintain insurance and therefore a mortgage. Personally, I would not agree to cover the seller's deductible as a buyer. Particularly when there is a pretty good chance they don't even pay it to the roofer.

I have seen sellers insist that a roof is perfectly fine after I said it was trashed and multiple roofers confirm and the buyer's insurance says they won't write a policy due to the roof. Rational common sense is not a given.

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Absolute....
What is the best avenue when the buyers inspector says the roof needs replacement BUT the sellers insurance company sends an inspector and says NO it does NOT warrant replacement ? OF course a roofing company will claim it needs replacement , its how they eat ! Are TREC inspectors qualified as roof inspectors ? What if the seller had a TREC inspector out before putting the home on the market and he certified the roof as OK !
I assume that eventually you just tell the buyer to walk, no reason for the seller to spend $15-$20k on a new roof that may not need fixing.

The Original AG 76 said:

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Absolute....
What is the best avenue when the buyers inspector says the roof needs replacement BUT the sellers insurance company sends an inspector and says NO it does NOT warrant replacement ?

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A roof can need replacement and not have damage that is necessary for it to be a covered insurance loss.

DadAG10 said:

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The Original AG 76 said:

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Absolute....
What is the best avenue when the buyers inspector says the roof needs replacement BUT the sellers insurance company sends an inspector and says NO it does NOT warrant replacement ?

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A roof can need replacement and not have damage that is necessary for it to be a covered insurance loss.

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If it is not " damaged" enough for an insurance claim then I fail to see that it NEEDS replacement . Would you spend $15k for a new roof on a house you are selling just cause someone thinks it NEEDS replacement ? Sounds like the AC issue. As long as it works it can be older than dirt and probably " needs" replacement BUT that is more of a WANT or even a SHOULD than a NEED.