You know you can replace a furnace in a day.
You can't always get through a roof with all the insurance claims and
everything else going on that's surrounded to get that done sometimes days, weeks, and months.
Hi everybody, this is Tracy Bookman owner of Homestead Roofing and in our last
"ask an expert" video, we were talking to Karsten Musaeus with Keller Williams real estate
and we were talking about roofing and real estate transactions, so I'd encourage you to go check out
that last video. Lots of information about whether or not home inspectors know what they're doing
when they get up on a roof. In our video this time though, we're going to ask Karsten the question:
if the roof needs to be replaced as part of the sale, can that occur after closing?
We found out I have to re-roof my house. Yep. But we close in 10 days.
Of course. Can, can, can the roof replacement, can that happen after closing?
I'm going to talk out of both sides of my mouth, you ready? Because I think there's yes
and no answers to that. Yes, all right. Can it be done? Theoretically yes. Why do I say it that way?
There's a whole lot involved here. I'm going to now put on - I used to own mortgage companies
so I'm gonna put on a mortgage lender's hat for a second for you Tracy and I'm gonna be that guy.
If I find out that I'm ready to make the loan, everybody's good, everybody's happy supposedly,
but then it comes to my attention that there's a roof issue that has not been taken care of
and that it's not going to be done prior to closing,
walk in the lender's moccasins for a second here. If I lend on that home and that roof has not been
completed, technically speaking, I have an unsalable loan on my hands, as a lender I cannot offload that,
reload my guns with more money and make more loans, I've got to hold on to that until I'm absolutely
sure that that roof's taken care of or I inherit major liability as, you know, so to
speak the retail lender to the public on this, because the guys I generally sell my product
off to as a lender want to know that we don't have a roof issue among other things.
Let's say, and this will take a little time, but I'm going to give you some scenarios. What happens
Tracy, if somebody agrees as a lender to do it and then the work never gets done? The, the roofer
goes out of business, any number of things, all of a sudden there's a great liability there.
You may say, does this really happen? Oh yeah. Yeah it happens not entirely infrequently. There
are times when that's the case. May I, may I echo an opinion? If you're listing your home, why not
have somebody look at it at the very beginning so you know in advance whether you're going to face a
problem to start with. Not your insurance company, but an actual Tracy person who we can trust to
get an honest evaluation. Excellent point. You know you can replace a furnace in a day.
You can't always get through a, a roof with all the insurance claims and everything
else going on that's surrounded to get that done, sometimes it's days, weeks, and months. Okay, so let
me, let me interject some information that would be helpful for homeowners that are listening,
realtors that are listening, again, I mean if you're a realtor and you haven't had to go
through some of these gymnastics related to the roof, this is going to be information that's going to
be really really helpful for you I think. So you know, especially if there's been a hail storm
which that happens occasionally here in Colorado Springs. We've been known in this area to have a few, right? Yes.
Yeah, if there's been a hail storm and roofers are over taxed with trying to get work done,
it's not an uncommon situation where that home inspection happens two weeks before closing or two
weeks before projected closing or something like that. Now all of a sudden we have people calling
us they're like, you know, I'm supposed to close in two weeks, can you get this roof done? Well no
actually we can't. We've got 15 other roofs ahead of you or whatever right? And a number of them are
buy, buy sell situations not just refinances we're waiting on, so everybody else gets theirs done too.
Right so, so this what happens in that point is we get asked by the realtors that are involved,
would you be willing to be paid in full out of escrow after closing, whether we're doing the
roof before closing or whether we're doing the roof after closing, it happens both ways,
right? That's what we get asked. Well of course if we're working with a realtor who we know and trust,
we're far more likely to do, to do that okay? So like if we're working with Karsten
and we get asked that question, yeah of course we'll, we'll get paid in full after closing.
But what you said just a little bit ago like, is lighting all kinds of lights
for me, right? It's like, oh I never thought of that. Like what you said, okay so if the roofer agrees
sure we'll get paid after closing, we'll get paid out of escrow after closing, but we can't do the
roof until after closing and all the other players agree to that, boom what happens if the roofer just
disappears? Then, then what what happens? Or I had one happen in the past, he passes away.
Tragic, and everybody was left a bit holding the bag. I'll tell you what happens in situations
not, not that particular one, but let's just say a lender is gracious enough to say okay as long as
we're comfortable enough and everybody's got it in place and we've confirmed with the insurance
company that there we go we've confirmed with the buyers and sellers that they're in agreement on
this post closing action we've talked the agents are all in agreement, the roofer probably the
key linchpin, is going yep I got your back you can count on me to do that, frequently what
will happen is and, and even title companies are reluctant to do this anymore, because they in in
Colorado they're the ones that help close the transaction between buyers and sellers and all the
paperwork, and we're asking them in some cases to retain from the seller a hundred and fifty percent
of the bid to replace the roof. So it's sitting there in the event, what happens if the roofer
has a bid and then he undoes everything and says oh my gosh the decking underneath is completely
rotten. Yeah. So unanticipated things with the best of intentions. Well there better be some
money there even if there's good intentions to be sure that there's enough to cover what goes on.
We're in an extremely seller, I mean, hot seller market all right, so things get bought the minute
they go up for sale almost okay? That's not a complete accurate truth, but it's, it's a
90 percent truth, I mean multiple offers blah, blah, blah. This pushes the envelope even more, I
mean, you don't even have time sometimes. I mean, you put it up for sale and two days later you
got 15 offers and you accept one and they do an inspection and the closing's in like a cash offer,
but we're still going to have an inspection, but two weeks. Oh that's great! And then you
have an inspection: trashed roof. Now what? And if you're up to your elbows as a roofing company,
or a lot of them are, and you don't have have time, can it get done that quickly?
Well then we have to extend closings. Now if you add the lender back into it, who's going
whoa I'm not as good as a cash buyer. I'm not as lenient as you guys may be Mr. Cash Buyer
we we're lending on that property being in good shape and we don't particularly get
involved in all the nuances of the people, we just want to know that everything's in place.
Hi everybody. Hey I want to remind you that this is video number two in a series that we did with
Karsten about topics related to roofing and real estate transactions. If you've got questions about
this particular topic feel free to give us a call at our office our phone number is right up here
719-433-6991 you can also visit our website that's right down here homesteadroofingcolorado.com
also if you've got questions that you'd like us to address publicly
leave those in the comments section down below. We read and respond to every question that we get on
our YouTube videos. Also if you like this video if it's been helpful for you, we'd love it if you
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you get notified when we've got new videos and like I say check back in with us, we're going to
keep publishing more videos addressing roofing and real estate transactions with our expert
Karsten Musaeus with Keller Williams. Until our next video I'm Tracy Bookman owner of Homestead Roofing.