Here’s a true story that happened to a seller and you be the judge; did this seller lose out on $100,000?
My buyers and I toured a home and when we walked in the front door, we saw all of these buckets on the floor catching the rainwater from an active roof leak. That’s not a good sign.
I call the listing agent and ask about the roof leak. The agent tells me the seller will not replace the roof and that the seller is selling the home as-is. With this roof leak, an appraiser will definitely call this out as a needed repair before closing, so what is the seller planning on doing then, I ask. The agent says, the buyer will need to pay for a new roof because the seller will not pay for it.
What My Buyers Did Next
My buyers and I looked at comparable sales and found a similar home that was updated and sold for $225,000 more than this one. My clients knew this was a steal of a deal, even if they had to pay $20,000 or $30,000 for a new roof.
But in order to make a sound decision, we really needed an expert to take a look at the roof. I went and and asked the seller for permission to do a pre-inspection and I had a roof contractor go out and take a look at this.
The roofer said the roof is in good shape, in fact, it probably has another 15 years of life left, and the leak is just in this one area. But he said the repair is costly: it will be about $800.
$800?! My buyers were so happy, they couldn’t believe it and they wanted me to write up that offer immediately. My clients offered $100,000 over the asking price.
Guess what happened?
The seller rejected their offer.
It turns out, the seller accepted a cash offer for the asking price.
My question is, if that seller knew that the home didn’t need a new roof and it wasn’t going to cost $10,000 or $20,000 or $30,000 but only $800, do you think that seller would have made a different decision? Would that seller have had a different outcome?
I don’t know the seller’s situation. But I do know that the seller had no idea of the cost of that roof or the extent of the damage because the listing agent did advise their client to get an inspection. (You may be asking why didn’t I provide that information to the seller? Contractually I cannot share an inspection or a bid with a seller unless they give me explicit permission to do so. I asked and the seller didn’t want it.)
Lessons to be Learned
I think it is impossible to make good, sound decisions without the facts. I tell my clients whether they are buyers or sellers to get the facts and talk to the experts so that you can make the best decisions for you.
With this seller not having this knowledge about the cost of the repair, this seller was not confident they could accept an offer with financing and with an appraisal.
Because my buyer did more research on the market and on the condition of the home, my buyer had the knowledge to submit a great offer.
I think if this seller had paid $800 to repair the roof before listing it, that seller could have received more offers, higher offers and not had to rely on a cash buyer.
By the way, do you know how many cash transactions there were in Thurston County in the last 3 months? In the last 3 months, only 11% of the transactions in Thurston County were cash buyers. So sellers, don’t hold out for a cash buyer.
For some sellers, getting a home inspection before they list it may be a good idea. Then they will have a clear understanding of their home’s condition, and yes, the seller will need to disclose the condition or repair the issues but there’s nothing wrong with disclosing. Having this information will help a seller determine a listing price, cost of repairs if needed, and the seller will then have the facts to make good decisions as the transaction progresses.
One last note on this, for sellers who are unable to make repairs and they are selling the home in as-is condition, I get it. Repairs are expensive, time consuming and may not be an option for sellers for whatever reason. But try to get information to understand what is at stake. In this case, it cost $0 to get a roofer to look at the roof. Do the best you can and call me if I can help you sell your Olympia area home. I’ll help you gather the facts so you can make the best decisions for you.
Be sure to check out my post and video about selling your home as-is and if that is a route for you.
