By LOIS KINDLE
Area real estate agents and people selling older homes are running into unexpected problems lately, due to new insurance guidelines that require repairs and/or replacements so buyers can obtain coverage.
“These things have to be taken care of so the sellers can get maximum value for their homes and potential buyers can finance them,” said Flo Vachon, a longtime agent with Keller Williams Realty South Shore. “Investors who pay cash can take their chances on fixing things after the sale and then finding insurance, but they usually pay less than asking for the home.”
Vachon said the moment they walk in the door, both buyers’ and sellers’ agents primarily look for issues in four areas: roof, electrical panels/wiring, plumbing and air conditioning/heating.
“It used to be if a house had issues, the buyer would get a contract saying they would fix any issues withing 30 days of closing,” said Lisa Hast, owner of Iron Rock Insurance. “But due mostly to fraud and the volatility in the insurance climate right now, companies no longer do that. They require all to be made beforehand.
“With today’s hot market, sellers can usually afford to make any needed repairs to get top dollar for their homes,” Vachon said.
But when the seller doesn’t want to make any necessary repairs, the buyer may need to purchase a less-than-ideal policy to get through closing,” Hast noted.
“It’s not impossible to get coverage, but it’s significantly more expensive and not as comprehensive,” she said.
According to Dusty Amatangelo, vice president of growth for Florida Building Inspection Group in Brandon, it all has to do with what insurance companies will or will not accept now.
She confirmed the main areas causing most issues are those Vachon stated previously: roof, electrical panels/wiring, plumbing and air conditioning/heating.
“Insurance companies look at the age of the roof and how much life is left,” she said. “Last year, the majority of carriers would insure roofs with five years of life expectancy. Now it’s mostly 10.”
Amatangelo stated inspectors check for any signs of leaks in the hot water tank, its age and if the temperature release valve was properly installed for aluminum wiring and electrical panels that have been recalled for safety issues, including Zinsco, Federal Pacific, Sylvania and some Challenger brands.
They also check for internal polybutylene plumbing and cast-iron sewer line plumbing, both of which are causing water damage.
“If you’re a buyer, the best practice right now is to make sure you’re working with a good insurance broker who can get you a policy with optimal coverage.”
