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Do You Have to Replace the HVAC to Sell a House?

Jun 14, 2020 by Marc Rapport
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Thinking of selling or buying a house with an aging HVAC system? Here are two numbers to consider: $4,820 and $300. The first is the bottom end of the average price for replacing a system, while the second is at the bottom end of the average price for a home warranty.

As a buyer, you want to know the systems work. As a seller, you can expect to have to prove it. Some jurisdictions and lenders may, in fact, require it -- in South Carolina we call it a heat-and-air letter -- and any savvy buyer would certainly do the same.

But do you have to replace that old HVAC system to sell a house? Or walk away from a deal that doesn't include a new one if you're the buyer?

Not necessarily. Veteran real estate agents from across the country say to first consider a home warranty.

Freon and a fried heat pump

"In our market I say 'no,' unless you're talking about a system that still requires Freon, because that's so expensive now," says Ann Langman, an agent for the past 48 years with Allen Tate Realtors in Charlotte, North Carolina, currently a notably hot market with few sellers and a lot of buyers.

She instead advises sellers to offer a year's worth of home warranty that includes heat and air and other mechanical systems. "Then the buyer can renew it themselves after that if they want," she says.

Personal note here: I bought a house here in Columbia, South Carolina, with a pretty old system once and got the warranty in the deal. A week after we moved in, lightning struck. Fortunately, no fire. It did fry the heat pump, though, and it was replaced for the $100 deductible.

From the mountains to the sea

Ben Fisher of in Park City, Utah, also recommends the home warranty route with the high-dollar properties his Summit Sotheby's International Realty agency specializes in at the ski resort town in the Wasatch Mountains.

"In a winter climate like ours, I would say it's only necessary to replace the HVAC prior to selling if the systems have reached the end of their reasonable life spans," he says. "If they are older, but still in working order and within their reasonable life span, I would recommend the seller pay for a home warranty for the buyer so they could elect to have these systems covered for one year and they could then keep that warranty in place annually after that."

Same at the sea with Yawar Charlie, Los Angeles-based director of the estates division at Aaron Kirman Group and a series regular on CNBC's latest real estate show Listing Impossible.

"A home warranty is an essential item I always encourage my buyers to insist on at the close of escrow," he says. Charlie says ensuring the HVAC is in working order is something sellers should do, too.

Interestingly, he says there are still some East Coast markets where oceanfront homes may not have air conditioning but that homeowners now are increasingly installing it "because it's a convenience everybody wants."

Being proactive with inspections and service

"In good markets or bad, get the house ready," says Langman, the veteran Charlotte agent.

Even before buying a home warranty, that can include having an expert do a thorough inspection of the entire HVAC system.

Prices vary for different markets and property sizes. pegs the average inspection price at $321, and as little as $200 for a house under 1,000 square feet.

And at the very least, have it serviced.

"Generally speaking, before we bring a property to the market, I encourage my clients to have the HVAC unit serviced since most people don't do it on a regular schedule as recommended," Charlie says.

Some caveats with that home warranty

Having it serviced can, in fact, become important after the sale. The warranty company that issued the insurance may require evidence that the unit had been serviced in the past. "I've been in situations where the unit is older, nonfunctioning, and then we use the warranty to try to get covered. The claim was denied because they said that the unit was not properly maintained by the previous owner and therefore did not qualify for the warranty," Charlie says. "This is definitely something I encourage my buyers and sellers to be aware of."

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