FHA Loan - From the Seller's Point of View

FHA loans usually mean you are going for 96.5% financing. The less you put down the weaker you look and are. Cash buyers usually get better deals then buyers with mortgages. A buyyer with a 20% down paymnt will have more lenders willing to lend them then someone with 3.5% down. However allot of time buyers want to go FHA even though they can afford a healthy down payment but simply choose not to and want to put very little down.

Adamc1303

in Real Estate - Sales 12 years and 11 months ago

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m926bk | 12 years and 11 months ago

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Is there any reason why, from a seller’s point of view, an offer with an FHA backed loan is less desirable than an offer with a “traditional” loan?  Are home inspections or closings made more difficult?  Thanks, all.

RBCG | 12 years and 11 months ago

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Having bought with an FHA loan, I’d say for the most part no. There is an FHA inspection, but that is solely to establish that the property is “habitable”, i.e. has a working kitchen, bathroom, is structurally sound, etc.They seem particularly obsessed with termites and other infestations, but that is not your problem, they just insist that funds from the loan be allocated to hire exterminators, etc. If the property is in decent shape (or even not-so-decent shape) there doesn’t seem to be a problem.   However, there seems to be a mythology among some real estate agents that FHA inspectors can impose obscure and capricious requirements on the sale of the property – the seller has to replace windows, or scrape lead paint, or re-do floors, or some such, I heard that several times when I placed an FHA-backed bid, but my actual experience (buying a pretty run-down property, with tons of lead paint and termites) was that the inspection was pretty pro-forma and easy. I guess it’s really just to make sure people are not buying completely uninhabitable wrecks.