With so many players involved, the sale of a home can feel complex and confusing. Add to that, an inspector or buyer who wants you to replace the roof before closing and you may be left scratching your head trying to understand the process. Here is a cheat sheet that explains the roofing process when a home is for sale. After all, you’re the home owner and you deserve to be in the driver’s seat.
1. Understand the Closing Process and the Players Involved
- Selling Real Estate Agent – The agent that helps the owner of the home sell the house. They are called the listing agent.
- Buyers Real Estate Agent – The agent helping the buyers buy the home. They are called the buyer’s Agent.
- The Property Inspector – Buyers often hire a home inspector to identify any issues with the property. This person will look over the whole house and bring up issues to the buyers (often this can be hail damage or an old roof they may think is hail damaged).
- Mortgage Company – This is the same mortgage company that is often listed on insurance checks as “additional insured”. This mortgage will need to be paid off at the real estate closing. They will have no claim on the home after the sale of the house when they are paid off.
- Escrow Company* – The company that pulls all of the closing documents together and when everything is executed (signed). They then take the money from the buyer’s new mortgage company and pay off the seller’s mortgage company and all outstanding liens and encumbrances or liabilities against the property. They record the closing documents and new liens with the County Recorder’s office.
- Title Company*- An insurance company that guarantees the new buyer that they are buying a house free and clear of all encumbrances (Mechanics Liens would be one of those encumbrances).
- Escrow Agent or Closing Agent – The person who coordinates all of the closing documents from buyers, sellers, realtors, mortgage companies, Title Company or anyone else involved in the transaction. The agent coordinates all of these documents and parties to make sure the transaction is documented correctly, closes and is recorded at the County Recorder’s Office.
- HUD1 or Settlement Statement – this is a government regulated document that shows where all the money flows from the closing transaction.
*Often, these are one in the same company or one person or company represents both of these entities.
2. Core’s Ability to Assist You
In any home closing, it is important that all parties understand the timing of the closing and construction. As your contractor, Core’s first priority is to help you understand the closing process. We will be happy to assist you with the details of ironing out the details with your mortgage company. By filling out our Third Party Authorization form, we will be able to work with your Mortgage company directly to expedite the closing process. We will notify them that we will be doing a roof replacement and make sure that they have the necessary lien releases before the home is scheduled to close. This places the Title and Escrow Companies on notice that we have lien rights and the result of the transfer.
A homeowner has a few different payment options when a home is for sale, please contact us directly if you are not paying out of Escrow. If you are:
- Paid out of Escrow – Sometimes, the closing needs to happen before the roof can be constructed. In this situation the Escrow company can hold the amount of the work plus an additional 50% (in case there are additional costs) out of the closing funds. Core will then submit our final invoice to the escrow company after completion.
3. Core’s Account Manager’s Role
In almost all cases of a home closing where the insurance company is involved, the Account Manager will shepherd the deal from beginning to end and make sure Expectations are Set, Then Met. They will make sure you understand The Core Way and where you are in the process. Naturally, the seller will want to rush the insurance depreciation and approval process. The homeowner and insurance agent often prove very helpful in requesting the insurance company expedite approvals and payments. The realtors in the transaction will also be very helpful in making sure that the insurance company is moving along so that the closing of the home sale does not get slowed down.
4. Things to Watch Out For
- Permits – Making sure the permit is included in price and that all parties understand the permit inspection process.
- Mortgage Company Endorsement – If there is an insurance check out there with the old mortgage company on it and that mortgage then is paid off there is no one to endorse that check.
- Supplementing – Just because everyone wants a house to close quickly doesn’t mean that the supplementing department has and is working on it. In a home sale situation, the Account Manager can assist in pushing the file through smoothly and efficiently.
- Moved Closing Dates – Often, the closing dates will change and Core will not be updated on changes.
- Supplements and Permits – If the insurance company is not budging and we are being requested to rush construction, then the homeowner is at risk for supplements not approved.
- Code Upgrades – If we put the roof on before supplementing, the insurance company has no time to notify us if the homeowner does not have code upgrades.
- Warranty – Warranties should be registered in the name of the new owner or they run the risk of the warranties not being transferred.
Gaining a better understanding of our process at Core Roofing + Solar and of the players involved will help you, the homeowner, have greater peace of mind. Replacing or repairing a roof on a listed home can feel overwhelming, but we are here to help. Please feel free to reach out to your Account Manager with any questions or to ask them how you can help with the process.