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How Much is a New Roof Worth to a Buyer??

By
Industry Observer

Here's a question for you:  if a house for sale needs a new roof and the sellers commit to having that done, is it realistic for them to expect buyers to pay more for the house?  How much more - the entire cost of the roof?  Half? 

This recently came up for me & my buyers, and I can somewhat see both sides of the question.  Certainly there is real value in knowing that a brand new roof is in place and new buyers won't have to budget for a major expense like that for a good long time. 

But it also seems entirely reasonable to expect there to be a functional roof on the place - even lenders tend to frown if the roof isn't going to make it through the next winter without leaks. 

So what do you think?  Should the sellers expect to now get a higher price for the house since they will need to spend more money for a roof, or should they just chalk it up to normal and necessary maintenance (even though of a costlier variety than needing new caulk around the tub!)?  And you appraisers on Active Rain - how do you view it?  Do you add value for a new roof?  How much? 

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Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

Higher price, no. Higher sellability factor, yes. Just like cabinets, toilets and fences (if typical), a buyer should always expect it at minimum. Even if the Seller just replaced it, it doesnt necessarily fetch a higher value per se. This also depends on how long the house is on the market. The shorter, the close it could sell for asking price - whether or not a brand new roof is not totally irrelevant, but I think it doesnt carry much weight.

Jul 08, 2009 08:15 AM
Kris Wales
Keller Williams Realty - Lakeside Market Center - Macomb, MI
Real Estate Blog & Homes for Sale search site, Macomb County MI

No no NO a buyer won't pay more.

We're talking about basic home maintenance.  (Good roof and mechanicals, etc.)  We're not talking about cosmetic updates.

A new roof will be more attractive to a buyer, but it doesn't add more value, at least not in my opinion. (I am mainly a buyers agent so I can pretty much speak from experience as to how a buyer will view this.)

Jul 08, 2009 08:37 AM
Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator

It depends.  Was insurance involved?  If there was insurance, the seller should only have to pay their deductible which isn't much at all. 

If not insurance, I've had this happen three times where the FHA appraiser required a new roof.  It's not completely fair to the sellers since the roof is "fine" and their insurance company doesn't mind covering it... in each of the three cases, the roof was split 50/50 and rolled into the financed amount so the buyers never paid a lump sum out of pocket but maybe $10 a month for those extra $2k.

Jul 08, 2009 08:41 AM
Nancy Conner
Olympia, WA
Olympia/Thurston County WA

Thanks for your comments Loreena, Kris & Donna!  I agree that I fall more on the side of a new roof (or other similar maintenance items) helping the home rise above the competition, but not necessarily becoming worth a higher price.  In this situation the sellers had a roofer come evaluate it while my buyers were in mid negotiation on price; roofing company said it needed replaced and provided a bid; seller decided to change their counter to cover half the cost of the new roof - & my buyers said thanks but no thanks.  No insurance involved - just a roof at the end of its useful life.

Jul 08, 2009 08:46 AM
Gabrielle Nemes
RE/MAX Realty South - Tumwater, WA
206.300.8421, S King & Pierce County RE Advocate

It's too bad your buyers walked. Yes, roofs are part of the general maintenance of a house ... but it's really hard to say what the position of the seller was here. With home prices at such historic lows right now, it could be that the seller just couldn't come up with 100% of the roof cost. Perhaps they could have found a lower bid. Some of these roofers are really high and, of course, some of them are scary low, too.

If the house was otherwise what the buyers liked, I don't think the buyers should have let that extra roof cost deter them. Prices will go up ... and the buyers would then have been reassured that for the next 20-30 years or more they wouldn't have had to budget or worry about a roof.

Jul 13, 2009 11:30 AM
Nancy Conner
Olympia, WA
Olympia/Thurston County WA

Thanks for your comments Gay!  And thankfully this deal did end up coming together with buyers and sellers both happy and a new roof in the offing before closing!  Gotta love it when you think a deal is dead in the water and it comes back to life!

Jul 14, 2009 10:02 AM
David Salvato
David Home Inspection Service Home Inspector San Bernardino - Los Angeles, CA

You are so right the true value is in knowing that a brand new roof is in plac. Peace of mind for most people...

Sep 14, 2009 10:24 AM