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20 Comments on 20% Down and " As Is" Conventiionals Can Have Same Problems as FHA
Another good reason to use professionals when navigating through the Real Estate waters...thank you
Jeff. Isn't that included, paragraph 5, of our Conventional Financing Addendum also??
#1- Hi Richie, true, buyers were not expecting this amount of repairs, but they are willing to do them.
#2- Yes Lenn, #5 Lender Required Repairs- Buyers agreed to them, but they should have gotten some estimates before agreeing and starting the work. Looks like they have the money, and would have made the repairs eventually anyway, but now they are under pressure to get the work done on time. I think they'll make it work.
I am finding buyers with FHA loans are closing quicker than buyers with conventional mortgages.
I have had problems on the few conventional loans I have had buyers use on Conventional. Luckily they the means to get it done.
I am holding my breath on one of these right now. It got past the appraiser with just a termite treatment, but still waiting for the Underwriters verdict. Underwriter has the last word.
Jeff, I haven't run into this yet, but I can certainly see why a lender would make the demands. It could definitely kill a few deals. We'll see, I guess. Thanks for the heads up.
Just went thru something like this. Had a crap appraiser. Got it closed but 56 days later.
Jeff - Wow! What a headache and a risk for both the seller and the buyer.
Jeff: For a property such as you describe, it sounds like what you need is a "non-conforming" loan. Ask your lender if they have any investors who take part in non-forming loans. The rates will probably be a bit higher, but they will get the job done for you.
Their hands are not tied by the same regulations that "conforming" loans have.
#3- Hi Melissa, Yes, these scenarios always seem risky to me. A buyer doing all this work on a property they don't yet own. Seems like many things could go wrong.
#5- Hi Keith, I can see where that can happen.
#6- Hi Chuck, think buyers having cash on hand is a major factor in keeping deals like this together.
#7- Hi Debbie, Good luck. Sound slike yours will work out!
#8- Hi Mike, Yes, I suppose when you think about it, a lender doesn't want to risk investing in hazardous money pit that some buyers might walk away from, and a property that will be hard to resell.
#9- Hi Bill, wow, 56 days sounds long, but glad you got it closed!
#10- Hi Christine, It sounds bad, but hopefully when all the major things are done, the appraiser will issue approval.
#11- Hi Karen, They had already went with USAA. I'm not their agent, I just know the buyers. They called us to do the brick and stone work, since that is what I did for 30 years before becoming an agent.
Fha financing can be tough. Thanks for the information and good luck.
#13- Hi Steve, FHA can be tough, but with old fixer uppers, conventional can be just as tough as FHA. Thanks.
Jeff, I just ran into this with a property I had listed. Fortunately, there weren't any major repairs.
Great information..I've never run into this, but it's good to know. I kind of assumed conventional financing would get a buyer/seller around some of those obstacles more typical with fha financing
From a lenders prospective, conventional and FHA loans don't differ much in terms of property conditions. It doesn't matter if someone is putting 50% down; if the house has issues they're going to need to be fixed. Sometimes small issues can be ignored with a large down payment but it's not a guarantee. In some cases FHA financing is the best on fixers using the 203k product. Every time I hear at a broker tour that the house has "X" issues and won't go FHA, I say to myself, "it won't go conventional either!"
#15- Hi Michael, Seems like many monor repairs aren't a problem, but once the repairs approach major and healt and safety issues, we can usually expect lender to require repairs. Glad yours went ok!
#16- Hi Brian, There are lots of agents, buyers, and sellers that think just by using conventional financing, they won't have to do any repairs. FHA and conventioanal can both require lender requested repairs to be done in order to approve financing.
#17- Hi Michael, I agree. Many agents don't know that. They just put in the MLS " No FHA" and think everything is going to be fine. This property would have been good for FHA 203K, but luckily buyers had the cash available to do the repairs.
"Time and unforseen occurrences be fall us all" as the wise King Solomon said" we just have to brace ourselves for it.
#19- Hi Fred, Yes they do. I suppose we just need to adjust and deal with things, and try to keep moving forward.