Down Payment Asst. vs. NO Down Payment Asst.--Which is the Strongest Offer??

By
Real Estate Agent with Casa Latino Four Corners, REALTOR, CDPE

Okay.  I am working with a Buyer (well, actually a few Buyers) that needs and qualifies for Down Payment Assistance with Orange County, FL.  The hoop that a Buyer with OC in FL needs to jump through, though, is that the PROPERTY must also qualify.  For a house in Orange County, FL to qualify for the program, it MUST have something APPRECIABLY improved or replaced within it within the last 12 months.  For example, it needs to have something NEW like a reshingled roof, updated electric, updated plumbing, or a new hot water heater.  You can't just use the funds (up to $35,000) for just any old house--it needs to be improved.  Why?  I have no idea.  But, for this particular Buyer to get $30,000 FREE from the county, it needs to have something updated or improved about it.  So, of course, not every house will qualify for the funds, plain and simple.  AND, the work has to be completed by a licensed person and proper permits pulled, if necessary.  AND, the Sellers need to provide the proper receipts, etc. 

So, a small pool of Buyers that are approved for the OC DPA program have a small pool of houses that fit the bill to get the funds. 

My Question to Agents and the Public is this: 

If a DPA Buyer puts an offer on a house and ANOTHER Buyer puts an offer on a house that is similar but DOESN'T need/qualify for the DPA money, which offer do YOU think is stronger in this market?  (For this example, say the house was just re-shingled in September of 2008.  The proper permits were pulled and the Seller has the receipts from the roofing company to get to the Buyer's lender.) 

Things to think about:

The DPA Buyer will have the funds necessary to close unless the County runs out of money

The DPA Buyer needs to make an offer to close within about 60 days or so (if you write it for 30-45 days to close, it most likely will NOT close by that time)

How good is ANY Loan Officer? 

Did both parties provide a Letter of Pre-APPROVAL to the Seller/Seller's Agent?

Have both Buyers made APPLICATION for a loan?

Were all THREE Credit Bureau reports pulled?  Or was just one and the Loan Officer is hoping the other two are in line with the one that WAS pulled? 

For OC, the loan must be an FHA loan.  FHA is NOT a bad word.  I usually means that there is less down payment REQUIRED than a conventional loan and the down payment may come from a number of places.  The only REAL difference b/t an FHA and a CONVENTIONAL loan is that, with FHA, the Seller MUST pay for the TAX SERVICE FEE, or TRETS.  That's it. 

The STRENGTH of an offer typically means "How likely is it that the contract will be executed?"  So, for financed offers, How likely IS it that the particular Buyer will be able to perform under the contract terms and conditions?!  Or, more pointedly, CAN the Buyer CLOSE ON, or BUY, the PROPERTY?

So, WHICH do YOU think IS THE STRONGEST OFFER?  A DPA LOAN OR A TYPICAL LOAN?  AND WHY? 

 

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Rainmaker
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Brenda Harmon
Century 21 Beal, Inc College Station, Texas - College Station, TX

Of course it is up to the seller.  If I were the seller I would take a traditional loan without

the DPA everytime.  Anytime bureaucrats are involved there is usually more strings.

Oct 28, 2008 08:31 PM #1
Rainer
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Lisa Spalding
Casa Latino Four Corners, REALTOR, CDPE - Longwood, FL
REALTOR, CDPE

Brenda-  Definitely, it's up to the Seller as to which offer to take.  And, yes, cash offers (with PROOF of funds) are first, then financed offers with 20% down are next.  But, if you are the Seller and get two offers on your home, one with DPA and one without, which would you choose?

Thanks for your comment.  :)

Oct 29, 2008 09:33 AM #2
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Rainer
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Lisa Spalding

REALTOR, CDPE
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