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Insurance to Close with an Old Roof
Trying to close on a primary residence with a 21 year old roof . Having issues getting insurance. My insurance agent dropped the ball and we are down to the wire without insurance. Looks like the only option is to provide a signed contract for a new roof to be completed within 60 days of closing. 100% fine with that as we are replacing the roof anyway. The issue is it's going to take at least 5 days for the insurance underwriters and Monday is a holiday. We're not going to close as scheduled, which I guess isn't a huge deal. Im just not happy that this wasn't addressed weeks ago. I'm not sure if I'm just venting or asking for advice. If anyone has any recommendations or insight, I'd appreciate it. Thanks, Ty
Sounds like you are just "venting." :)
Was alerted to this as a "roofing" subject, nope! lol But seems like you know what has to be done (20+ years on a regular shingle roof is good), so find a reliable roofing contractor in your area, work out a deal and get it done in about 1 month (weather permitting), and things fall in place.
If you have specific Roofing questions, let me know!
(with J's Roofing Richardson, TX)
Property/Casualty Insurance brokerage was my prior 20 years of work. If you still need help, please send me a direct message and I can offer some suggestions. One of those ideas for the group to see is that you may ask the lender to agree on an x wind policy for the short term since we are out of wind season and then you can pursue an all perils policy once the roof is complete. You can find an x wind option same day through Excess and Surplus lines markets
What I usually recommend in this situation is that you request a seller credit for a replacement roof. Then use NREIG to close with the existing roof. Their rates are a little higher but they provide the best way to close on any property with issues. Then replace the roof under your supervision using your own roofer. Once the roof is replaced, send the information and pictures to your property inspector and they will generate a new 4-point for you and you can switch property insurance at that point to a cheaper plan.
@Stephen Dispensa Very slick! thanks for the insight (and education).
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I had this same issue. Seems like anything over 20 years and the insurance company gives you a hard time. The truth is nobody knew how old the roof was so I said it was 15 years. I also had an inspector come on to the roof that told me I had about 7-10 years left and that seemed to put the insurance company at ease.
Quote from @Ty Brady:Ty,
Trying to close on a primary residence with a 21 year old roof . Having issues getting insurance. My insurance agent dropped the ball and we are down to the wire without insurance. Looks like the only option is to provide a signed contract for a new roof to be completed within 60 days of closing. 100% fine with that as we are replacing the roof anyway. The issue is it's going to take at least 5 days for the insurance underwriters and Monday is a holiday. We're not going to close as scheduled, which I guess isn't a huge deal. Im just not happy that this wasn't addressed weeks ago. I'm not sure if I'm just venting or asking for advice. If anyone has any recommendations or insight, I'd appreciate it. Thanks, Ty
When a roof needs replaced during the home buying process, the only remedy is to either have the seller replace it before closing OR do what you stated in your initial post, you have to replace the roof within 60 days of closing. Usually sellers don't want to replace the roof before closing because what if the buyer backs out? Most sellers will still do this after the appraisal comes back as the sellers are basically kicking the can down the road to the next set of buyers who will run into the same issue. The seller will also now have to disclose the roof issue on their property disclosure so future buyers will know about it. With that being said, the sellers are going to extend this closing, they are not going to risk going back on the market, especially with a bad roof. It sounds like you need a new insurance guy!!
Quote from @Jerry V.:
Sounds like you are just "venting." :)
Was alerted to this as a "roofing" subject, nope! lol But seems like you know what has to be done (20+ years on a regular shingle roof is good), so find a reliable roofing contractor in your area, work out a deal and get it done in about 1 month (weather permitting), and things fall in place.
If you have specific Roofing questions, let me know!
(with J's Roofing Richardson, TX)
Hey Jerry, Sorry for the confusion. Yea, I guess I was just venting. We got everything sorted. Got insurance and we are closing tomorrow. We're putting a 24g galvalume standing seam roof on next month. What kind of roofing do you guys do in Texas?
Quote from @Matthew Wolk:Hey Matthew, thanks for the reply. I believe it was a miscommunication with the insurance agent. She assumed it was an investment property and was trying to get builders risk for rehab. It's going to be a live in BRRR for me as my primary residence. Everything should work out, it was just stressful for a bit. Lessons learned all around. We pushed closing back a week, got insurance and the clear to close. We'll be replacing the roof next month. What kind of loans do you specialize in?
Quote from @Ty Brady:Ty,
Trying to close on a primary residence with a 21 year old roof . Having issues getting insurance. My insurance agent dropped the ball and we are down to the wire without insurance. Looks like the only option is to provide a signed contract for a new roof to be completed within 60 days of closing. 100% fine with that as we are replacing the roof anyway. The issue is it's going to take at least 5 days for the insurance underwriters and Monday is a holiday. We're not going to close as scheduled, which I guess isn't a huge deal. Im just not happy that this wasn't addressed weeks ago. I'm not sure if I'm just venting or asking for advice. If anyone has any recommendations or insight, I'd appreciate it. Thanks, Ty
When a roof needs replaced during the home buying process, the only remedy is to either have the seller replace it before closing OR do what you stated in your initial post, you have to replace the roof within 60 days of closing. Usually sellers don't want to replace the roof before closing because what if the buyer backs out? Most sellers will still do this after the appraisal comes back as the sellers are basically kicking the can down the road to the next set of buyers who will run into the same issue. The seller will also now have to disclose the roof issue on their property disclosure so future buyers will know about it. With that being said, the sellers are going to extend this closing, they are not going to risk going back on the market, especially with a bad roof. It sounds like you need a new insurance guy!!
Quote from @John McKee:
I had this same issue. Seems like anything over 20 years and the insurance company gives you a hard time. The truth is nobody knew how old the roof was so I said it was 15 years. I also had an inspector come on to the roof that told me I had about 7-10 years left and that seemed to put the insurance company at ease.
Hi John, that's what I'm learning, after 20 years most companies here in FL don't want to touch it. It did't help that the inspector noted that there was zero years of life left on the shingles. Now I know for next time.
Quote from @Stephen Dispensa:
What I usually recommend in this situation is that you request a seller credit for a replacement roof. Then use NREIG to close with the existing roof. Their rates are a little higher but they provide the best way to close on any property with issues. Then replace the roof under your supervision using your own roofer. Once the roof is replaced, send the information and pictures to your property inspector and they will generate a new 4-point for you and you can switch property insurance at that point to a cheaper plan.
Hi Stephen, thanks for the suggestion. We ended up getting insurance with a signed roof replacement contract and we have 60 days to replace the roof after closing. After that, our insurance will drop significantly. I did however call NREIG to see what they had to offer, but they said their policies are strictly for investment properties and since this will be my primary for the time being, it wasn't an option. But, now I know for the future. Really appreciate the heads up on that option.
Quote from @Jason Bryant:
Property/Casualty Insurance brokerage was my prior 20 years of work. If you still need help, please send me a direct message and I can offer some suggestions. One of those ideas for the group to see is that you may ask the lender to agree on an x wind policy for the short term since we are out of wind season and then you can pursue an all perils policy once the roof is complete. You can find an x wind option same day through Excess and Surplus lines markets
Hi Jason, thank you so much for the insight. We ended up getting insurance through Citizens with a 60 day window to replace the roof after closing. It should work out, but I'd love to learn about other options for next time. I'm sure this won't be the last time we'll have to think outside the box especially with how crazy insurance is getting here in FL.