I own one house in a regrowing market in MD. I have owned this property for 4 years and started living here almost 2 years ago. I bought the house with about $50,000 in equity but since then I have had tenant issues and almost lost my house to foreclosure but ended up working things out with the bank and remodifying my loan. Since then I have done a ton of work in here and although the market is going up, my contractor is telling me that I need to fix the roof(which is in fair condition) before I sell the house. But I'm ready to put it up now "as is." I bought the house for $125k. Back then it appraised for $170k. I have gotten a few rough estimates and the house is now valued approximately at $220k but the modification bumped my loan up to $136k.i have already spent about $25k in home improvements. Should I fix the roof? Would not fixing it be a huge blow to the profit?
Investors will buy headaches as they see them as a way to walk into equity... Owner Occupants generally don't want that. You'll find a couple that are looking for fixer uppers for sweat equity but generally a roof falls outside of something they can do themselves so it wouldn't really be attractive to them either.
If you're selling to someone as a home, I'd fix the roof.
Generally speaking the rebate you'd have to offer to get someone to ignore the problem will be larger than fixing the problem.
Also look at it from a cash perspective... would they rather put their 3.5% down on $250k or put 3.5% down on $240k and immediately have to spend $10k to fix the roof? Pretty easy math for most... most buyers value cash pretty similarly to investors.
Then I don't know what to do because I certainly don't have $10k to fix the roof myself. Can it not be a contingency expense on the cost of the house?
A lot depends on how bad the roof really is, and if it's bad enough to cause trouble with lenders. If it's not too bad then you may be able to get the roof 'certified' by a roofing inspector. If it is very bad then a buyer may not be able to secure a loan. But if that's the case, you may be able to get the roof redone with the roofer getting paid at closing so the money doesn't have to come out of your pocket up front.
Jean Bolger, 33 Zen Lane | http://www.solidrealestateadvice.com
You indicated the roof is in fair condition, which leads me to believe it's not leaking or causing damage. If this is the case, sell it as is. When you get offers, look at the buyers financing contingency. If they are attempting to get FHA financing, the roof may or may not become an issue. If the buyer is getting a conventional loan, the roof will most likely not matter. Don't be afraid to ask about your buyers financing intentions.
Thank u guys for the insightful responses.
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