The issue with R22 systems is that the HVAC world is phasing out that r22 refrigerant. Although I can buy some r22 refrigerant online for $369.00 for 10lbs and have maybe one of my licensed friends put it in and check for a leak etc...

If not disclosed in listing and found after inspection or disclosures, a buyer will ask for a discount or bolt.

When do you plan to sell your house?

I plan to sell next month.

My plan would be to hopefully negotiate when they bring it up.

Have you gotten a quote to do a repair?

So can you pay off the loan for the unit with the proceeds on the house? That means a lot less interest.

Check around with other AC servicers. You may find one that has R22.

Not all will, especially if they prefer to sell new. That price isn't bad.

I had two companies come out to fix it and they both just told me to replace it. They basically sent sales guys that had zero tech ability and just tried to sell me a system. Pretty much worthless. Two services fees down the drain. I won't go into the details, but it was ridiculous. I had my hvac friend come out and test it to find out there was no refrigerant in it...

Yes, if I got a new system I would pay it off with the profit from the house sell. But as discussing here, I'm trying to find the best solution really than spend $9,000+ on it.

You can also discuss this with your real estate listing agent to see what their advice and experience is.

IMPO

SR

It would not make financial sense to invest in an old R-22 system. However in your case it is worth paying for the repair. This assumes the leak can be found and repaired. If you call another HVAC company explain what you want before the service visit.

First, I think you have some fuzzy math and that is problematic... it is hard to make good decisions with bad information. Although interest is expressed in APR it is only for the period outstanding. So you are going to pay interest on $6,750 x rate/12 x months. Even if you get financing at 22% for three months (and pay it off with proceeds) you are talking about $7,120 rather than $9,000. Furthermore, it is likely that you can get a 6-month no-interest offer and only pay $6,750 (many HVAC companies have 6-month or 12-month interest free financing).

In many states you would have to disclose it. My state notes, "Whether or not they have been corrected, state any problems affecting...cooling system." If your state has something similar then you are going to be required to disclose it. Any realtor worth 20 cents is then going to demand the system be inspected by an HVAC professional who is probably going to advise replacement. So you are going to be stuck replacing it anyway.

Replacement after the purchase agreement is way more problematic as your house was likely already priced to sell with an older AC unit and you can't reprice it with a new unit. It also gives the buyer input and approval over the repair and if you refuse the buyer's demands, you are going to have to disclose the reason the previous offer was terminated to any future sellers.

Many buyers don't have the extra money to do the repairs outside the contract and so offering a discount often doesn't work as too many buyers can't replace it.

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I prefer to control the work completely outside the contract. I would replace it and price the house accordingly.

Here's the financing options they have. I actually cancelled the install and told them I would get back to them about it. I have a couple extra services on top of the $6,750, insulation and something else. $8,000 total.

Here's the financing options they have. I actually cancelled the install and told them I would get back to them about it.

Option 7 is six months no-interest.

If you are worried about being able to pay it off before the interest starts, you could wait to replace it until you have an offer. Just write into the disclosure information, "Seller to replace AC system with new 5 ton 15-seer unit." Since you are disclosing the new units specs the buyer can't trigger the contingency over that (theoretically).

Option 7 is six months deferred interest. This means you get to pay the interest 6 months later. It does not mean no interest.

In addition to stating the seller will replace the condenser and coil, you could also offer a credit at the time of closing. You can pick a number that you think is fair, it can be less than the quote you received. Some buyers may like getting the credit and then purchasing the HVAC system of their choosing. It eliminates risk of a bad installation for you.

I like these options. The deferred has a note as the bottom that says no interest if it's paid in full within the 6 month period. If it's not, the interested that accrued in that time will be added into the rest of the payment. I'm not a fan of these options, but that's what the company is offering.

I would get my hands on the R22 and have the friends put it in. There is nothing against the law about selling a house with an old system in place -- the house I bought 6 years ago had an older system in place, it didn't deter me from buying the house, since the system was in working order. If an actual repair needs to be made, not just the addition of refrigerant, then have a company do the repair -- it isn't going to cost $9K, and you then won't have anything to disclose because the system will be in working order.

I would not replace the system, too costly and not necessary if the old system is up and running, you may not recoup that money. If a buyer balks at the old system, offer a reasonable allowance and let them deal with it -- many buyers would be quite satisfied with that option.

@mxk3 z5b_MI - If an actual repair needs to be made, not just the addition of refrigerant, then have a company do the repair -- it isn't going to cost $9K, and you then won't have anything to disclose because the system will be in working order.

Just to be clear, this is not correct in many states. In those states you must report problems and repairs, there is no exception for an old system that is in good working order after repairs. This doesn't apply to all states. So check your state's disclosure requirements before making a decision.

However, in all states if the system has the same problem in the future and the buyer learns of the repair there is some risk of legal action against the seller

If a buyer balks at the old system, offer a reasonable allowance and let them deal with it -- many buyers would be quite satisfied with that option.

Remember that allowances are now sales discounts rather than monies the buyer can use for repairs. Many buyers don't have the cash in hand after down payment to make repairs. Since 2008 I have tried to avoid anything that might require an allowance as I just end up doing it anyway only now the buyers are supervising it.

I'm in Texas.

I assume this can be taken off closing costs. They should have the money already for those costs.

Making a mountain out of a molehill. So s/he discloses a repair, it is NOT necessarily a deal-killer -- cooling system leak repaired in 2023. That's it. Whoopedeedoo. Actually, I don't think ever said the unit definitely needed a REPAIR anyway, just the refridgerant added.

Add the refridgerant and call it a day. A buyer may not even bat an eye at the older system, so don't even bring it up or add an allowance before you're asked for one -- just don't lie about the age of the age of system.

Refrigerant wouldn't need to be added unless it leaked out ... which means there's a leak that needs to be repaired, which may entail replacement of the evaporator coil or the condensor/compressor or both (essentially the whole system) depending how many leaks and where are they located.

My 17+yo system exhibited effects of a leak to the point of completely not cooling (in August 2021, in TX). I had it serviced, refrigerant added. The servicer confirmed "a couple leaks in the evaporator coil" ... I banked on the leaks being tiny and it working for at least through the remainder of the summer and brief TX winter (heat pump) for replacement before the summer season. It worked for one week, quit cooling again. Replacement of the whole thing which took until January 2022 due to supply issues.

You're saying you've been quoted $6750, but need financing so it brings it to $9000. I would not finance to sell. The 6 months deferred interest means you have to pay about 1400.00 per month to not pay interest.

Sometimes help is needed, so contract with a real estate agent - even though you're saying you are trying to do a FSBO.

You will need a disclosure - regardless, so you might as well disclose the cooling issue.

What Do I Have to Include in a Texas Seller’s Disclosure?

So. Many. Things. Let’s walk through the basics of what goes into a Texas seller’s disclosure.

Home Items

First, you have to tell the buyer about major items in and around your house—and if any of those items are broken or need repairs. That includes:

• Septic system
• Security systems
• Fences, garages and other fixtures
• Appliances and hookups (like a stove, dishwasher or washer/dryer)
• Fire and carbon monoxide detectors and emergency escape ladders
• Heating and cooling systems (HVAC, ceiling fans, woodburning stoves, etc.)
• Water and energy suppliers—for instance, city water or well? Natural gas or solar power?
• Recreational features like fireplaces, pools, outdoor grills, and related items like pool heaters and fake chimneys

Equipment and Systems Needing Repair

Maybe your old sump pump leaks (yuck!). Maybe the furnace smells funny (mouse nest? rust? who knows!). Or maybe the plumbing has seen better days. Whatever needs repairs, the buyer needs to know—because one of you will have to fix those problems!

https://www.ramseysolutions.com/real-estate/texas-sellers-disclosure

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.

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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

Get it replaced with the least expensive option available and from a dealer that offers no payment for 12 months. Take the cash out at closing and pay off the purchase. Does your state require 15 SEER minimum efficiency? If not go bottom of the line for a house you are going to sell.