Thoughts on replacing a HVAC system before selling

9 years ago

Hey there! We have a 40+ year old house with the original gas furnace and AC. We've lived here 13 years and maybe have had $800 in repairs, so we've never really given much thought to replacing it...it's not energy efficient, but it works! You've gotta love the quality of that old Lennox system! We're thinking of selling in the next 1-3 years and really, we don't have that much equity, ($30,000 - $40,000) so I hate the thought of sinking a lot more money into the house. ($8,000 or so?) When we sell, we'll need some money for the next house!

Today someone we were talking to was going on and on about it, saying "there's a glut of homes on the market and no one is going to want to buy a house with a 40 year old furnace and AC." We had previously mentioned it to a realtor, but he seemed fairly unconcerned. But it really has me worried now.

I'd appreciate any thoughts.

Featured Answer

tigerdunes

9 years ago

Most realtors will tell you that HVAC matters little. Mainly, that system is working, reliable, and is able to provide cooling and heating comfort to the home's living area.

With that in mind and the idea that you might be selling home in near future, I would lay a little groundwork. First have system thoroughly inspected, cleaned, with a full comprehensive PM service by a reliable dealer. Find out exactly what you have...brand, model, size, age, efficiency. Also include a thorough ductwork inspection. I will assume there is no asbestos. Get a written report.

Get a quote on a new system. Personally, if a prospective buyer likes a home, most will not discard the home because of the HVAC. They will just take the age into consideration, realize system is way past its normal lifetime, and adjust their bid downward to reflect reality.

As an accommodation, you could offer a specific HVAC dollar incentive at time of closing. For instance, if new replacement system costs $10K, then offer a $5 K incentive. Of course this is nothing more than a game. But many sellers do this.

Many prospective homeowners who know little about homes request and pay for a home inspection. I have mixed feelings about the reliability and importance of this service. But you can bet that the age of the HVAC would be pointed out. In fact, this may be something you might consider so you could work on any known negatives from the written inspection report. Costs vary depending on location but you would want a business ASHI certified.

Then there is another train of thought. You know existing system is living on borrowed time and is terribly inefficient perhaps even noisy. Why not go ahead, upgrade, and enjoy the benefits of both reduced operating costs and increased comfort before you sell. This would be already accomplished before you sell and one less headache for the future owner. Make no mistake though. You can not recover that cost at time of resale.

IMO

This post was edited by tigerdunes on Sun, May 11, 14 at 10:12

Comments (15)

lilion
Original Author
9 years ago
Thanks! What a terrific overview! I really appreciate it.
Related Discussions
any thoughts on rheem hvac systems
Q
Comments (3)
Speaking as a homeowner, I've had great experience with Rheem products. I just replaced my 20 year old furnace and airconditioner (Rheem builders grade) with top of the line Rheem equipment. The original installation wasn't the greatest (I always say the duct system was designed and installed by drunks). However, both units were still running and had never had professional service. I just decided I wanted to replace them on my schedule, rather than have a failure during the height of heating/cooling season. After researching for over a year, I had decided that I wanted a Rheem Modulating furnace. I chose that model because my (then) current furnace was vastly oversized, was extremely loud, and caused uncomfortable temperature swings (which drove me up the wall). The new furnace runs longer (although mostly at lower firing rates) and all but eliminates the temperature swings. I combined that with a 2 stage a/c which runs mostly in 1st stage (better humidity control). Since you are adding on, it is most important that the equipment be sized properly. Demand that your HVAC contractor give you a printed copy of Manual J. Manual D would also be nice, since your going to be modifying/adding to your ductwork. Good luck with that, as I had interviewed 12 contractors, none of which would do one. Had to do my own. As far as zoning is concerned, I'm not sure if there is a controller that will work with that furnace. It would be nice though, if it is possible to zone, the furnace can easily adjust firing rate (and CFMs) according to changes in load. While I have no problem with Rheem equipment, you need to be confident that your contractor will do a top rate installation. This is most important. V
...See More
Thinking of selling - very old HVAC system
Q
Comments (14)
If it ain't broke, don't replace it. We just bought a home built in 1973. What I loved was that the home came with a warranty, if something breaks I just call the warranty company and they send someone right out to fix or, and here is the value to your buyer, if they can't fix it they replace the system. It was less than $500 (sellers paid) and it covers a whole host of things, including HVAC. As the buyer I just have a $100 deductible. Two weeks after we bought the house the 20+ year old water heater stopped working. Only cost me $100 buck to get a new one. Friday night the AC stopped working. Whatever the problem, I know that it won't cost me more than $100 bucks because of the warranty.
...See More
HVAC Dilemma! i want some help in regards to my HVAC system . thank y
Q
Comments (11)
Sizing can be less of an issue when you have multiple units. Because each unit is controlled independently, provided of course the unit itself is not over sized for the area in which it serves resulting in excessive short cycling. In your case 3 ton plus 2 ton isn't necessarily equal to 5 tons of cooling... unless you drive those thermostats really low. By having two systems with total capacity of 5 tons (which, most of the time this would be oversized for a 1700 - 1800 sq ft structure) has a few advantages. 1. You have the ability to use one system only during low heat days or set the opposing unit higher. The unit set higher only runs if load conditions warrant.... meaning if it's not hot, the thermostat controlling the unit does not call... the unit can not run without a call... 2. Utility bills can be much less... because you rarely use both systems at the same time. You run the bedroom system when you sleep, the other when you're awake. If you have a home office in one the bedrooms you may need to rethink things a bit. 3. Extra capacity for when it's hot out. When it's hot you have the capacity to cool the home. (even while entertaining guests --- additional people add heat) Remember heat waves come, heat waves go... a so call 'properly sized' AC system is essentially properly sized roughly 10% of the time... especially if that system is a single speed AC system. Alot of people I come across like to sleep cool. So for that reason I doubt I would change the configuration of the space. Once you realize what you have, the choices you make are mostly budget type concerns. Essentially a set up like this runs like a 2 stage system. This kind of subject is above the pay grade of many... choose your contractor wisely. I service the Katy, Texas area.
...See More
Should I replace my HVAC system before I sell?
Q
Comments (25)
I am going to give a more detailed explanation of why I typically replace old systems when I am getting ready to sell a home and the system has a problem. Houses with new units sell for more money than houses with old units. According to the NAR, replacement of old heating and cooling systems has about an 85% return on investment when selling. That seems a little high to me, but certainly buyers price in new units. So let's make some assumptions and do a little math. Let's assume that the new unit only has just over a 50% return on investment and would increase the sales price by $3,500. So, by not replacing your unit, you are paying some amount to repair it, let's say $500, and losing $3,500 in sales price, but are saving $6,750 in replacement. So you are basically saving $2,750, by repairing your old unit rather than replacing it with a new unit. However, there is one additional complicating factor. Most buyers are going to have an old unit inspected by an HVAC company and too many HVAC companies are just looking for an excuse for replacement. So you have the added concern that the buyer is going to want an allowance or to have a new unit replaced. So you could be spending the $6,750 anyway, except you are losing the advantage of pricing the home higher. You are going to have to pay the $6,750 after spending on the repair and pricing the home $3,500 less. So in the above scenario you would be betting on a $2,750 savings against a $10,750 loss ($3,500 reduced price + $500 repair + $6,750 allowance or new unit). I typically sell a home every year, sometimes two, I have been burned on that gamble too many times. --- Now in your area or at your price point the ROI when selling could be more or less than 50%, you might actually be at 85% which makes it a no brainer, or you might be at 25% which would make repair much more attractive. Good luck
...See More
klem1
9 years ago
Tiger said "You can not recover that cost at time of resale. "
I believe that is a fact. I also agree that your decission should be made based on how long you will own the house.
Assuming you plan selling in 2015,I suggest keeping the old system. Buyers ALLWAYS want to pay less than asking so include the customary coushion plus the price of a new system when you list the house. Chances are the buyer will hire an inspector so get out ahead and have the system serviced and inspected before the listing. Ask for a checklist report and include it with listing documents. Otherwise the buyer's inspector will reccomend having it inspected by a hvac company which implys he saw problems. If the buyer makes age of system an issue,you have the cost built into the asking price.
jakethewonderdog
9 years ago
Agreed. You would never get your full amount out of replacing the unit. The age of the unit will come out in inspection and it will be very helpful for you to have a written quote for replacement. Offer half of the replacement cost if you need to in order to do the deal. The fact that it's working is in your favor.

As a homebuyer - I would much rather select and install the unit than have the seller select a low-end unit just to get it sold. A cash incentive is much more attractive to me.

As to the glut of homes... that's very different based on your location. In my area it's just the opposite... so don't believe what someone said unless they are in the business and would know.
gsciencechick
9 years ago
You might want to go ahead and get some quotes, because your system may decide on its own it's time to stop working. It is much easier to get it replaced when it's optional vs. when it fails and it's either freezing or a heat wave. Don't ask me how I know this! You might be able to get a pretty good deal and have peace of mind your system won't fail with the next heat wave.
tigerdunes
9 years ago
Purchasing new systems is generally better in Spring and Fall, not Summer or Winter...

I agree about having a new system installed in a breakdown situation, less about money and more about scheduling.

TD
SaltiDawg
9 years ago
If you do keep your present unit and its age becomes an issue to a would-be buyer, I would NOT share any estimates with that buyer - it would send the message that you knew ahead of time that it might become an issue. allow the interested party to select a dealer and get a quote. (If it is out-of-line high you can dust off the "old" quote and ask that it be re-submitted to you.)

YMMV
tigerdunes
9 years ago
A 40+ yr old system could be an issue, really?...
SaltiDawg
9 years ago
"A 40+ yr old system could be an issue, really?..."

Well, by handing over a pre-staged estimate to replace the furnace the seller really confirms that it is.... might even suggest that the seller, knowing of the problem, has padded the price.

Really? lol
lilion
Original Author
9 years ago
I can see where giving them the estimate from the get-go might make them think we expect it to die any day. I do like the idea of getting one and then just holding on to it. We'll call our Lennox dealer who's done the work in the past, and get it serviced and get something from them on what's been done since we've owned the house. I do think that will be quite helpful. I do know ours is not efficient. Several years ago (7 or so) we did get several estimates to replace it, but we just never needed to. When we bought our house we did get a home warranty, expecting it to die. Obviously, it didn't. Every spring and fall when we turn it on, I'm somewhat surprised it's still working. We have an attic fan, so we don't have to use it until it's staying over 80 or dipping under 40.
tigerdunes
9 years ago
Don't kid yourself. A 40+ yr old system could die any day. You have been on borrowed time for over 20 yrs and clearly are the exception, not the rule.

TD
lilion
Original Author
9 years ago
Well, obviously. Hence my surprise when we turn it on and it works. Although our neighbors, who have lived in their house 42 years, still have the original furnace too. (Same builder.) They did replace their AC in the last 10 years. It's crazy it still works. Apparently, 40 years ago, Lennox built one heck of a system!
tigerdunes
9 years ago
Strange about that, those furnaces were tanks while I have seen mini frigs larger than those old AC condensers. Neither not worth repairing even if parts were available.

IMO
jakethewonderdog
9 years ago
The question on the table is if you replace it before you sell it or not. And If by replacing it you remove what could be a significant impediment to the home selling.

Yes, you are on borrowed time. I think that's understood.

The question of the HVAC unit will not come into play until the inspection - after an offer is made on the home. Unless someone catches that issue before hand, it will not affect the marketability or the bid price for the house. As long as the unit is operable it's not a defect that the owner must disclose at listing.

It will (probably- but may not) come into play post inspection and you should anticipate having to provide a cash amount to remedy the problem. Again, I would start at 1/2 the price of a new system or slightly more as my initial offer. You need to have a good idea of what that would be - so you need estimates. That said, the potential buyer will likely get his own estimate at that time.

As a seller, this saves you about half the cost of replacing the system and the hassle (or it might not be an issue at all for the buyer).

For the buyer, they get to decide what system (instead of the rock bottom unit that someone installs to sell). In addition, they get to decide if they want to install a new system or not. (they could take that money and use it for decorating) What's more, if they install the system instead of the seller, the warranty will be in their name. Some warranties are to the original purchaser and aren't transferable. I would very much prefer the cash as a buyer in this situation.
klem1
9 years ago
He with gin and grapefruit juice has the right aproch. Selling a home is more about preceptions than cold hard facts and numbers. The commonality amoung buyers is they don't want to buy a seller's problems. Amoung people as a whole ,understanging of structral and mechanical systems is uncommon. As witnessed by the people who come here to ask questions,what % of the population understand hvac operating efficiency? Point being a CPA will look at cost of taxs,insurance and utility bills and hesitate because insurance is high because property is in a 50 year floodplain. If our man tigerdunes is buying the same house,insurance likly never becomes an issue. Heck,the foundation might be split but the hvac will either be ship shape or the seller will be making allowance for it. Point is that if the buyer sees a recent report saying the hvac is operating and doesn't need repair,he has no farther questions about it and moves on to see if there's room to park his boat. What saltidawg is saying is don't wake any sleeping dogs,leave that to the buyer. What I was saying in my first post is be prepared in case buyer wakes one,you already know how to quit him down with minium of fanfare.
Ok,so after seeing how jake put it,that's even a better observation on when and what to replace. Obivously jake has seen newly painted houses for sale where the master bedroom is lime green and purple.

This post was edited by klem1 on Mon, May 12, 14 at 14:58

Thoughts on replacing a HVAC system before selling

tigerdunes

Comments (15)

lilion
Original Author

Related Discussions

klem1

jakethewonderdog

gsciencechick

tigerdunes

SaltiDawg

tigerdunes

SaltiDawg

lilion
Original Author

tigerdunes

lilion
Original Author

tigerdunes

jakethewonderdog

klem1

COMPANY

BUSINESS SERVICES

GET HELP

CONNECT WITH US

Thoughts on replacing a HVAC system before selling

Comments (15)

lilionOriginal Author

Related Discussions

lilionOriginal Author

lilionOriginal Author

COMPANY

BUSINESS SERVICES

GET HELP

CONNECT WITH US

lilion
Original Author

lilion
Original Author

lilion
Original Author