This is a subject that has been a constant thorn in my side in my entire career.
TLDR? Low down payment buyers are the largest group of buyers and they are willing to pay more for your home/listing.
Over the years I have had conversations with listing agents that wont entertain lower down payments or no down payment loans with no reasonable explanation.
While this is mostly happening on FHA loans, I have also seen it on USDA, VA and even lower down payment Conventional loans.
Most recently it was an FHA deal with VERY qualified buyers I have been working with. They missed out on numerous deals in a competitive market and I know in more than one case the seller took a lower offer than theirs.
WHY would you accept less money? Why would you care how much a buyer is borrowing as long as they are qualified?
Seller's... You are leaving money on the table by accepting less money for a cash offer or larger down offer. The only things you should look at: Your bottom line, are they qualified, and do the dates work for you. Even a cash buyer needs to be qualified.
The fear of the unknown is taking money out of your pocket.
- The loan type doesn't cost a seller any money.
- An FHA Loan is actually easier for a buyer to qualify for and often gives them a lower monthly payment as well.
- There is no special FHA appraiser that kills deals. FHA removed the VC sheet from an appraisal over 20 years ago. The check list that was on the old FHA appraisals is long gone!
- In my world we pick from a pool of appraisers and they are the same people that appraise for conventional as well. If I were to hand you an FHA appraisal and a Conventional appraisal you wouldn't be able to see the difference
This isn't just me venting here (although I am definitely venting with a purpose to educate)... There is Data to back it up. The FHFA home appreciation index has outpaced the other home price models for years. FHFA includes only loans mortgaged with conforming loan amounts including FHA, VA and Conventional while the others include cash deals, alternative and jumbo financing.
Our bread and butter buyers will pay more to buy a home so don't discount that offer with an FHA loan.
The biggest barrier to home ownership has always been savings and down payment. It isn't easy for buyers to save enough money for a large down payment while paying for rent and life's expenses. Most move up buyers are depending on equity from a previous home and also don't have any savings.
For the past few months well over 1/3 of all buyers have been First Time Buyers who typically do not have the funds available to put a large down payment. leaving them out or discounting their offers you are penalizing your bottom line.
YES, all buyers need to be qualified and I do understand that probably more than most. If the lender is an xyz internet company with no local knowledge- you have to worry about any potential offer no matter what the down payment is. If the buyer's lender is reputable, local and willing to talk to you... that is more important than the down payment.
If you are interested in following me on social media, I am on just about every platform as @RobRauf or @RobertRauf where you will see more of "me" in real life. Work, Sailing, Wine, Travel and of course my dogs.
If you are looking to purchase or refinance a home in NJ, please give me a call, I can also help you in all 50 states, CMG is licensed throughout the country.
Robert Rauf
Mortgage Loan Originator NMLS# 248937
http://www.RobertRauf.com
or my blog: http://activerain.com/blogs/rrauf
Cell (732)740-0175
RRauf@CMGhomeloans.com
www.RobertRauf.com
Since 1987 I have been helping my clients fulfill their dream of home ownership! CMG Home Loans is located at 222 Commons Way Toms River, NJ 08755. NMLS #1820. Visit www.RobertRauf.com for more information. NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey, Toms River NJ 08753, Toms River NJ 08755, Brick NJ 08723, Brick NJ 08724 Mortgage in Ocean County NJ, Mortgage in Monmouth County NJ, Jackson NJ 08527, Howell NJ 07731, Lacey 08731 08734, Beachwood 08722 Bayville 08721,
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