Home : Blogs : LaShawn Norden, REALTOR, (321) 377-0157 Your Real Estate Advocate in Florida : Central Florida Real Estate~The Good, the Bad & The Ugly by LaShawn Norden, RE/MAX REALTOR

The Value of Personal Property in a Real Estate Transaction with a FHA Loan

Over the course of the last several months, I have represented several Buyers who have purchased a home using a FHA mortgage.

While one would think that all FHA loans have the same underwriting guidelines, when it comes to the value of personal property in a real estate transaction, this theory has proven to be incorrect.

In three of the five transactions, the "end buyer" for the loan requested a specific addendum to the Sale and Purchase Contract that stated that the personal property being conveyed with the home had no value and was being left out of convenience to the Seller.

In two of the transactions, I understood the reason why...the first seller was including a washer, dryer and a freezer with the home purchase and in the second transaction, a free-standing jacuzzi was being sold with the property. In the third transaction, however, the built-in appliances (range, dishwasher and microwave) were the only items to convey.

In chatting with the loan officer and their FHA underwriter, I was told that many of the "investors" who are the "end" buyer for FHA loans have their own criteria the underwriters must meet in order for them to purchase the loan.

So, in a industry where the rules change daily, it was recommended to me to add a clause to all FHA contracts that states:

"All personal property listed on the "As Is" Contract for Sale and Purchase agreement, as well as on the Seller's Real Property Disclosure, is being sold with the residence for the Seller's convenience and has no monetary value."

With that being said, if you are a Seller who has a stainless steel appliance package in your home, don't be alarmed if the Buyer's agent asks for you to sign an addendum stating that the appliances have no value. It's not that they are trying to get something for free...they are just working within a system where the rules change on an ongoing basis.

And if you are a Buyer, it might be a good idea to ask your agent to incorporate the above clause in your sales contract...just to be sure there are no last minute issues!

Serving Buyers and Sellers in Central Florida,

LaShawn Norden, PA, REALTOR, RE/MAX Central Realty, (321) 377-0157

LaShawn@LaShawnNorden.com, www.LaShawnNorden.com

Posted by LaShawn Norden, REALTOR, (321) 377-0157 Your Real Estate Advocate in Florida on 08/31/2009 04:06 PM

Comments (5)

FHA Loans in the Home Buying Channel

personal property, fha financing, buyers, buyers agent, buying a home, central florida, lashawn norden

This post has been included in Florida Information Seminole County, FL Information
Post is included in group: Seminole County Florida
Post is included in group: RE/MAX Active Rain Bloggers
Post is included in group: Florida Realtor® Network
Post is included in group: Club Chaos
Post is included in group: Central Florida

5 Comments on The Value of Personal Property in a Real Estate Transaction with a FHA Loan

AUG

Not a bad suggestion. Also, keep in mind, if the buyer wants a credit for new floor covering, it is always better for the seller to give a credit for that dollar amount towards the buyer's closing costs instead. The credit for floor covering will make every underwriter a wreck.

In Virginia most appliances convey with the property so aren't considered "personal property." Anything that is outside the norm should be on a separate bill of sale and not part of the transaction.

SEP

BRAVO - BRAVO! I, too, had run into this recently and pretty much had to write in verbatim what you have writtne above. You are correct, the guidelines change daily and we can never be sure that what is true today will be true tomorrow!