Put House on Market, Discovered Roof Leak, Now What?

28 Replies

My wife and I just bought a new personal home - one we can finally house hack!  We're going to sell our current home and use the equity to pay off my student loans (and because we wouldn't come close to even the 1% rule).  Here's our dilemma:

We found water damage on the ceiling as we were painting.  We call a roofer that is a friend of a friend, he comes the next day and "fixes it" at no charge.  We celebrate for about 4 hours until it rains and I got up to the attic to check on it - still leaking.  We get somebody else out to take a look and they recommend at least repair the last 2' of the roof and re-flashing the chimney - about $800.  I go ahead and get a quote on a full replacement - $6,180.  They both seem like a risk to me, but do we roll the dice and go high or low?

We're currently listed at $189,900.  If we do the $800 fix, I'm afraid we turn off buyers because it will be (and look like) a band aid on a roof that has 5-10 years left on it.  Even in our super hot market, I wouldn't surprise me if we had to accept $180,000 because we turned too many people off.  Am I thinking too worst case scenario?  Our agent has suggested biting the bullet, putting on the new roof and raise to list to $192,900.  This obviously handicapped our net to $186,000 before closing costs, even with a full price offer.  We have to spend $6,000 up front, but we still potentially come out ahead of the patch repair route.

We had originally thought to offer a $4,000 credit but are too afraid of the bank not loaning on the house if the roof is leaking.

What would you all do?  Which lesser of two evils is going to let us keep more of our equity in the end?

Hi @Robert Fisher ,

That sucks, sorry to hear. I will say though you have reasoned it out and are approaching it logically not emotionally which is huge. I don't know your market but I tend to lean toward the put the roof on and market it with "new roof". If everything you said was true in my market that is the way I would go.

Good Luck!

Get the new roof. Most buyers these days want things ‘easy’ and don’t want to deal with issues.

I would vote for the new roof. I had a house that went on and off of contract 3 times because of an aging roof. Every inspector that came with the buyer was more than eager to point out the roof nearing it's lifespan even though it was leak free. We had the roof repaired and that was not good enough. Finally we had a contract that worked in spite of the old roof. The only reason we did not replace the roof ourselves is it was a flat tile roof with cheapest quotes coming in at 22K. HOA required this type of roof which really hampered sales for everyone on the street.

Also, in my state it is very difficult to get homeowners insurance with a roof nearing the end.

Yeah, I've been leaning to just bite the bullet and put the new roof one.  It's just so painful to send $6000+ on the way out the door.  But if it improves the bottom line and sells faster (which would be great considering we close on our new home in 3 weeks), then it's probably the way to go.

To give an idea of our current market in Lynchburg, he's a few stories I've come across:

- My wife and I wanted to look at the house that had been on the market for 24 hours.  It had 6 offers already, one of them went under contract and one as a back up offer.  The "Under contract in less than 24 hours" has happened to us multiple times.

- A guy at my local REIA made offered $12k over asking price, about 8%, on a different place and lost.

- Some friends of mine, offered more than asking price on a place that was already overpriced because they were afraid of losing another one. (My attempts to talk them off the ledge obviously failed.)

Is the roof leaking in multiple places? My guess is that there is a "place" that the roof is leaking and these common locations are around vent pipes, chimney flashings, etc. I've seen thousands of dollars of damage that could have been prevented with a $4.00 slip over vent pipe boot.

We've bought 2 house that had to have new roofs installed. This came up during the inspection and both times the mortgage company and the insurance company would not move forward until the new roof was installed. One had lots of hail damage and the other one was 30 years old and had excessive granular loss (you could barely see any rock left on the shingles). Neither one leaked but they wouldn't insure either one in their current condition. One seller claimed it on their insurance and ended up getting roof installed for no cost to them. The other had to bite the bullet and spend $5-6k because it was just old and worn out. They tried to get me to pay half of the cost and I refused. I told their agent that they should have replaced the roof years ago because of how bad it was and they wouldn't be able to sell the house to anyone other than a cash buyer in it's condition. They replaced the roof and it almost made up for all the money I had to pour into the house to fix all the stuff the sellers Jerry rigged over the past 30 years.

@John Teachout It's just around the chimney somewhere in the flashing, but a roofer and I have caulked it in various spots, but it's either no enough for there's another spot.  We managed to get it to stop dripping into the house but the sheathing still gets damp to the touch when it rains.

If it's leaking around the chimney and there's still life left in the roof. It would make sense to fix the actual problem and not just replace a whole roof because of it. Maybe the chimney needs to be completely reflashed. Also, sometimes masonry can become porous and actually leak water through brick or block. Not sure what your chimney is made of but I would find out what your actual problem is and fix it. Wouldn't it stink to put a new roof on and still have a leak?

@Robert Fisher roof problems will come up during inspection and can prevent a deal from going through. It is tough to just repair the flashing and patch the roof, without leaving a weak spot. Once a roof is patched, it is compromised. If you have a brand new roof, that is a selling point and even if there is signs of previous leakage, the inspector will pass it fine with a new roof. 

I am curious have you looked into keeping your old home as a rental property? Maybe the numbers don't work but in that price range it seems like an option.

@Robert Fisher patch it and keep it on the market. Just like buying a home, it's a negotiating tool. The roof probably doesn't raise the value to the end buyer, and they won't know that it's been patched when they view the property. Let their inspector say it needs a new roof and negotiate it from there. Why spend $6k on a new roof when you can give a $4k credit at closing?
Originally posted by @Alan Pederson :

We've bought 2 house that had to have new roofs installed. This came up during the inspection and both times the mortgage company and the insurance company would not move forward until the new roof was installed. 

Oh my god - I had almost the same situation and it totally sucks when the real estate agency try to make you pay for their mistakes. In 2012 we moved to a new house and there was a huuuge problem with wiring (don't ask how we overlooked it when we were choosing it - some problems you can't see until you live in the house) and when we asked the agent to fix it he insisted to split the costs... We were so cross with him. Luckily we managed to terminate the contract without penalty, cause - ok, now we might win over him and convince to do stuff properly, but what next!? Hate how people try to sell garbage(( 

So.. I'd recommend everyone to look for the real estate agency by asking friends and relatives etc. From my side I'd recommend Tranio - they are quite reliable and the second house we bought with their help was really good. Sure - they are probably no ideal solution but nobody's perfect. 

@Joe Splitrock Renting it was our original plan but the more I thought about it, and especially since we bought a house at the higher end of our budget, it made more sense to me just to sell. Perhaps if we refinanced and cashed out the equity, we could still pull everything off but then I would increase my interest rate from 3.25% to 4.75% probably. Selling allows us to pay off my student loans, pay down the new house enough to get the monthly mortgage payment closers to what we’re paying now while still upgrading to something with an in-law suite for Airbnb, and have some leftover for a down payment on a rental that, once rehabbed, might fall in the 1-2% Rule. If we sit on the market too long or other unforeseen problems show up in an inspection, we still may go the rental route rather than take less than what we think it’s worth.
@Jason D. They’ll know it’s patched because it’s on the front of the house, right in your view as you come down the driveway. The roof is at least 15-20 years old and has typical fading and coloring so even if I had a bundle of the orIgInal shingles, it wouldn’t match.

Issues like this scare many buyers. Enough that they many won't even offer on a property with a leak, foundation issue, or electrical problem, no matter how minor. People hear "roof leak" and think $20k+ having never replaced a roof before. 

The other issue is the buyer might not have the cash to be able to fix it themselves, even if they are ok doing so. At $189k, their down payment could be as low as $6,615. @ $193k, that down payment would only increase $140, and monthly payment increase about $25. So they could either come out of pocket almost double, or they could add a negligible amount to their payment, both options with a new roof. Most will choose the later.

Consider also if you will be able to even get anything extra by putting on a new roof or if $189k was from comps with OK roofs. The home might only be worth $175k now with this issue.

Lastly - the roof has probably experienced hail damage. If so, your insurance could likely replace it for you and you pay just the deductible.

Originally posted by @Matthew Olszak :

Lastly - the roof has probably experienced hail damage. If so, your insurance could likely replace it for you and you pay just the deductible.

This. Have you thought about going thru insurance if you don't want to shell out the full cost yourself?

Originally posted by @Victor S. :
Originally posted by @Matthew Olszak:

Lastly - the roof has probably experienced hail damage. If so, your insurance could likely replace it for you and you pay just the deductible.

This. Have you thought about going thru insurance if you don't want to shell out the full cost yourself?

One of the roofing companies we've had look at it said, in their experience, there wasn't enough damage to it for insurance to cover it.  

Originally posted by @Robert Fisher :
Originally posted by @Victor S.:
Originally posted by @Matthew Olszak:

Lastly - the roof has probably experienced hail damage. If so, your insurance could likely replace it for you and you pay just the deductible.

This. Have you thought about going thru insurance if you don't want to shell out the full cost yourself?

One of the roofing companies we've had look at it said, in their experience, there wasn't enough damage to it for insurance to cover it.  

Get several other ones on it to be sure. Never go with the first/only opinion. If there truly isn't enough damage, then fix it to the best of your ability and sell it.

Repairs on a roof are typically short-term bandaids, and depending on how old your shingles are, sometimes trying to make repairs often causes bigger problems. Most roofers I know hate even doing repairs because of the whole "last man in" theory - fearing blame and time wasted on a call back if the roof leaks, regardless of whether the roof leak is his fault or not. 

And you're correct - an old roof may cause issues for the financing, not to mention the inspections. The last thing you want is for a buyer to come back post-inspection wanting a $20K credit because they called the guy who pays to be the top result on Google and that's how much he quoted.

I agree with your agent. Put on the new roof (a complete tear-off, not a layover), and make sure the warranty will transfer to the new owner. The roof is one of a homebuyer's biggest concerns. A new roof will result in more potential buyers, a faster sale, and it should easily pay for itself.