We hear so much talk about buyers being pre-qualified or pre-approved, but what about pre-qualifying the house that is being sold.
I was inspired to write this post after reading a post and its comments that was written by Valerie Osterhoudt. ~ FHA guidelines are making it hard to keep deals together ~ She talks about a home that she is trying to sell and just came across another change to FHA loans because the buyer was qualified with a FHA loan. The key point in this conversation was that "everything was going smoothly until ...." Until the loan was being processed after the appraisal was done. Read the article that Valerie wrote in order to get more details. (ps - The issue mentioned in the article is also an issue for USDA loans - Just food for thought)
What I wanted to bring up is that some of these issues can be addressed prior to a buyer accepting an offer. Not everyone can remember every detail when it comes to what is allowed and not allowed, no matter what type of financing the buyer is obtaining. Let's take a look :
Why can this be such a great idea?
You could get a true expert that would know many of the lending guidelines when it comes to appraisals. If one would suggest an appraisal, I would make sure that appraiser is approved to do FHA appraisals also. And have this person view the home from all angles. Some of you might think about just hiring a home inspector. My advice would be to hire an appraiser.
The second idea would be to list the issues regarding the home being sold and not hide them from prospective buyers. Hey, I have heard many types of stories. My main point, if you know about it, make it known to everyone.
Lastly, get your loan officer involved with the issues. Have them run it by their underwriter. I would suggest all things that aren't ordinary within the surrounding area. Valerie's story is a perfect example, because it was well water. Another is that Erica Ramus just listed a property and asked me if this property would be okay for specific types of financing.
Wait, I know many will harp because it would be another cost to the seller when trying to sell their home. Maybe $375 to $500. How could a realtor explain this cost to the seller?
- The listing agent can sell it as the cost of selling the home.
- Split the cost with the seller when trying to win that listing or pay for yourself.
- Have the buyer pay for the cost within the sales price.
Reminder : Throwing caution to the wind. Some of you will think or sell the idea that the appraisal could be used by the new buyer. I would not recommend this at all. To many new appraisal rules on how appraisal should be ordered and or the time period in which an appraisal is good.
Summary : The ending result, how about being pro active. Market yourself aas the problem solver prior to unexpected problems, and not just keeping the fingers crossed. If you get resistance from the seller, use Valerie's story as an example.
Times have changed. Be ahead of those changes before you find out the hard way. It's easy to criticize after the fact, asking why certain loans are tougher on certain issues. This is another reason why FHA loans sometimes get a bad name. But a few things to keep in mind. As I mentioned, Valerie's issue is also an issue on USDA loans. And do you truly know what is the better loan for that buyer? That a conventional loan could be more expensive than a FHA loan, even with decent credit scores?