(Closed) Has anyone sold a home to a buyer with an FHA loan?

posted 4 years ago in Home
Post # 2
Member
1592 posts
Bumble bee
  • Wedding: November 2010

cucumberroll:  It shouldn’t have any bearing on you at all. It just means their mortgage will be HUD/risk-based (probably because they are a first time homebuyer and/or won’t have to put much down as a down payment).

Post # 3
Member
683 posts
Busy bee

cucumberroll:  it could take longer a fha has more restrictions. Fha does a special “appraisal” that is kind of a second inspection but if they find repairs they HAVE to be done or they will not close on the loan. 

We purchased our first house fha and they did not have vents in every room. They had to modify the duct system to put vents in all livable spaces. It was an old home and thats how it was designed, to have a central vent. There were a few other small things. 

We sold that home to an fha buyer and we did not have to do anything extra. Probably because it was all done 3 years ago.haha 

I would google FHA aappraisal requirements. Gives you an idea on things they could pick you on. And those are must. They wont close on your home and it will be on your record for 60days. So you cant sell to another fha buyer.

Post # 4
Member
683 posts
Busy bee

I am not trying to scare you out of it though! We bought our first home and closed in 45 days. The fha buyer of our home closed in 30days, they closed faster than our conventional! Just giving you some things you might want to research, I dont know the age of your home or condition at all.

Post # 6
Member
674 posts
Busy bee
  • Wedding: June 2014

Another thing to think about is the mortgage $$ appriasal, if it comes in below contract price and the buyers aren’t willing to pay the difference and you don’t want to accept the appraisal price (say they offered $150K and appraisal comes in at $135K, they don’t want to pay the difference and you don’t want to accept the $135K) the appraisal price stays linked to the house for 6 months and could potentially affect any future appraisals if you need to find a new buyer.

Post # 7
Member
381 posts
Helper bee
  • Wedding: June 2012

Really that isn’t so different then a conventional loan.  You don’t HAVE to fix anything but the loan won’t close without you doung it or the buyer having done it (I do know of cases where the buyer agreed to pay for things to get done).  On a conventional loan the buyer still has the right to walk away.  You can refuse to fix something and move on to another offer.  

Post # 8
Member
329 posts
Helper bee

The final settlement statement is no longer called the HUD. Its now a CD – closing disclosure which needs to be provided to the buyer three days prior to closing. You probably won’t know the bottom line numbers as they are not required to be shared with the seller … But you can always ask for the closing statement 🙂 

Post # 10
Member
329 posts
Helper bee

Most attorneys recommend having a home inspection before you accept the contract, so you can fix the little things yourself. Most buyers will ask for licensed professionals to fix everything

Post # 12
Member
329 posts
Helper bee

cucumberroll:  well if you’re curious how much profit you were making. A lot of sellers don’t take into consideration that they have to pay the realtor, taxes, etc. 

Post # 13
Member
62 posts
Worker bee
  • Wedding: September 2018

As other posters have mentioned, the FHA appraisal is far more strict than the appraisal process for a conventional loan. You can google the requirements, but essentially the concept is that all systems of the home must be in working condition and not in a state of disrepair. There are few items that I feel like are more nitpicky than others (a single cracked windowpane that costs $50 to replace could be a required repair), but for the most part, the requirements are not that outrageous and many FHA buyers who don’t have a ton of cash would want those requirements to be met anyway regardless of their financing. All FHA appraisers are different though; some will follow the guidelines exactly and others will allow a bit of wiggle room, especially if the overall condition of the home is good. I’ve feel like (in my market, at least) FHA appraisals have become less problematic over the past year or two.

Ultimately, you are not forced to do any repairs that you don’t want to do. However, refusing to do repairs may leave you with a cancelled contract, which may or may not negatively impact you when you market the home again. 

In both my profession and personal opinion (I sold my first house to an FHA buyer), if all factors are essentially equal, I would prefer to sell to a buyer with a conventional loan. It becomes more of a decision if the FHA buyer is offering significantly more or has some other factor in their favor. For example, I had 2 buyers interested in my house and I chose the FHA buyers over the conventional buyers because the conventional loan buyers seemed incredibly indecisive and borderline obsessive/crazy before they even wrote an offer – I thought I would have more trouble with them than I would the FHA appraisal. I’m glad I did – there were no issues on the appraisal (even though I was aware of and disclosed the existence of a few minor items that could have been problematic) and the buyers were super easy to work with.

It’s a tough decision, but if the FHA buyer is offering more and your house is in a good shape (and isn’t ancient) and you feel like it meets the requirements, I think you should go for it!

 

Post # 14
Member
2902 posts
Sugar bee
  • Wedding: June 2013

We’re in the process of buying our first home and discussed FHA vs conventional with our mortgage broker. His opinion was that an FHA loan wouldn’t take longer to process, and that the appraisal/inspection issues wouldn’t really change anything for us because a) if the appraisal comes in low, a conventional lender probably wouldn’t approve the loan anyway, and b) the vast majority of issues that would keep an FHA loan from closing are things we’d want the buyer to address anyway, even with a conventional loan. 

Do you have an attorney you’re working with? I bet they’d be a good person to ask since they probably have lots of experience closing with both types of loans. 

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