Replace old A/C before selling house?

Question

tl;dr: would I get my money back if I replaced the leaky old A/C before I sell my house?

The central air conditioner in my house is a little over 20 years old. I just had to pay $200 to add freon, and I had to do the same last year, so I think it's safe to say it's leaky and probably needs to be replaced. But we're planning on selling the house within the next 2-3 years.

So, would it be best to spend the few thousand $$$ to replace it so that we can tell potential buyers it's a new A/C that doesn't leak and uses the newer ozone-layer-friendly coolant, or just keep replacing the expensive ozone-layer-killing freon and let potential buyers know it needs to be replaced and maybe have to knock a few thousand off the selling price?

Answer 1

If you have the means, I would replace it. It's no guarantee that you'll get your money back on it, but it's one less potential item to sour a deal. In some states, if not most/all, you are legally obligated to disclose the issue to potential buyers anyway. Not only that, but if you use your A/C with some regularity, you'll save a fair bit on utility costs with a 20-year newer model in addition to the $200/year Freon spend.

I bought a place with a 20-year old AC unit, it doesn't leak and works pretty well, but I requested a home warranty and offered quite a bit less due to age of all HVAC and roof on the house. If it's just one big item/appliance that a buyer will be concerned about replacing in the near future, that's easy to overlook, when it's 2-3+ aged items many buyers will pay attention. If it's more of a starter home then you could likely find an inexperienced buyer who doesn't realize what kind of costs they're looking at, but taking advantage of that would be pretty low.

Fall/Spring are typically best times to get a good deal on new HVAC items.

Edit: I believe there is still a tax credit available for an energy efficient upgrade on AC, $300 off your new AC unit: https://www.energystar.gov/about/federal_tax_credits/central_air_conditioning

Answer 2

When I sell a house, I do the cosmetic repairs and provide selling concessions (AC, roof, carpet, etc.) because I believe that you don't recover the full cost of money spent on big ticket items. In addition, many people like the idea of being able to select their own decor (carpet, appliances, etc) should they be in need of upgrading/replacement. I've seen homes where the seller put in all new carpet and within a few weeks, it was curbside, waiting for removal to the dump.

If you were selling your home in the immediate future, I'd recommend offering selling concessions. Given that you are talking about selling 2-3 years down the road, you're going to have to weigh the cost of $200 a year for Freon replacement as well as the inefficiency of your old AC unit and try to ascertain which might be more cost efficient.

Answer 3

You almost never get back the cost of home repairs or improvements in an increased selling price. If you were planning on putting the house up for sale tomorrow, I'd say no way replace the A/C. No buyer says, "I was willing to pay $150,000 for this house. But they just replaced the A/C? Oh, that's a $3,000 unit, so I guess I'm willing to pay $153,000." That's just not how people think.

This page, http://time.com/money/3703939/home-improvements-return-on-investment/, lists various types of home improvements and compares their costs to what realtors estimate they add to the value of the house. Notice something interesting? NONE of the items pay back 100%. The best increase the sale value by about 80% of the cost.

The only things where you're likely to get your money back are things that are low cost and very visible. Like painting, repairing holes in the walls, maybe replacing stained carpet, that sort of thing.

The far easier and safer thing to do is to be willing to make concessions. If a potential buyer says, "Hey, I like the house, but this A/C unit really needs to be replaced, and that will cost $3,000!" You can always say, "Okay fine, at closing we'll include a $2,000 allowance toward the A/C." You can usually get the buyer to agree to accept less than the full cost.

When I was young I bought a house with a leaky roof. I barely had the cash for a down payment, never mind to reshingle the roof immediately after buying. So I made a deal with the seller that they'd reshingle the roof, but we increased the sale price so that I was really paying about half the cost, and then that increased price was just part of the mortgage. I think that sort of thing is fairly common.

Now you say you're not planning to sell for another 2 or 3 years. So then the question becomes, how much benefit would you get for yourself from a new AC unit in 2 or 3 years, added to any increased sale price. Presumably you'd save the cost of freon re-charges. Maybe the AC would work better and the house would be more comfortable. It's very difficult to put a price on that.

I make improvements to my house based on the perceived value to me. I generally count $0 for increased sale price. I figure I'll probably live here at least another 5 years, so will I get my investment back in 5 years? Most of it is intangible, like I recently had a new bathtub put in because the old bathtub was ugly and disgusting looking. It doesn't save me any money, but it just makes the house nicer to live in.

Answer 4

Don't install something you don't know if the buyer wants. Especially white carpet.

First, as a seller, you're not motivated by quality of living, because you won't be living with the choice. To you it feels like a financial transaction, spend X, hope to get Y more at close. You are driven by the motivation of saving money, because if X>Y, the entire point is lost. So it is imperative that X be as cheap as possible, and that leads to poor choices.

There's nothing worse than wanting a house with Feature W, and finding out that the fool owner just installed a brand new, cheap X. Which he damn well expects you to pay for, full boat, at closing.

Classically, your customer would find a brand new, value-priced A/C from a low-tier brand, when at the least he'd want a higher quality unit with much better LEED rating, and more preferably, a heat pump.

Answer 5

Selling a home, like anything else is marketing. I would focus on things that will attract Buyers. While I try to do much of the home maintenance myself, My wife is a property manger now. I am astounded at how often things get replaced rather than repaired now, just to keep tenants happy. I think a new furnace would make sense in a hot market, that might make the difference for some people. However, I don't know that it will or should get mentioned in the listing. But make sure the mfg warranty is transferable.

Answer 6

As Jay and Harper said, do not spend a lot of money overhauling this. Central AC is almost always highly overpriced, and buyers are not going to be willing to pay what you will have paid for it.

Instead, buy a can of R-22-compatible stop-leak product and add it to the system; you can get it for $30 or so on eBay, and possibly can get it with a pound or two of R-22 for $100-150. As long as your leak is small enough that the system holds refrigerant and works for a few months (or even weeks) after you charge it, the stop-leak is a near-permanent solution.

Answer 7

If you are selling the house now and you do not live in why just not throw away the AC? I mean it would be cheaper to just remove the AC and sell it as is.

Also it is not too expensive to just buy a new AC, in Greece where I live it the cheapest one costs about 264 Euros (310 USD in xe.com) so it is not too expensive in the long term compared to the freon placement. Also you can replace it with a second-hand with inverter from one and buy it for cheap.

And if you are woried to the price you can just add 300USD dollars to the house's retail price (assuming thew price range is not too big between US and Greece).