Dear Michael: I am selling my home and received an offer from a buyer with an FHA 5% down payment. My house is in bad shape; it needs a new roof and other repairs. Will it be possible for the buyer to get a loan?
Answer: For the property to be eligible for FHA loan approval, it must first be appraised by a certified FHA appraiser. FHA loan property requirements for appraisals state that the home must be in fairly good condition. Things that could disqualify the property include a leaky roof, structural problems and/or damage, missing siding or paint and other issues. The appraiser must determine if the appraised value of the home meets or exceeds the maximum loan-to-value requirements for FHA mortgage loans. If the appraised value comes in below those requirements, the borrower could have to bring more money to the closing table.
If your home has just been listed, I suggest you wait for a better offer. Chances are that your home with the repairs you mentioned may not meet the FHA guidelines. It’s not always the price you are offered on your home that determines how good an offer is; the terms may be equally as important.
Dear Michael: I sold my home and was supposed to close escrow three days ago. Now, we are told it will be next week. Is there anything that we can do to speed up the process? The buyer’s lender keeps requesting more documents.
Answer: This is unfortunate but very common. With current guidelines, lenders are reviewing every file and can request a last-minute document that can and will postponed the sale and delay the close of escrow until all their conditions are met. This outcome will cause delays and inconvenience for both buyer and sellers.
If you have planned moving expenses and are waiting for the proceeds from the sale of your home, you will have to wait until the official close.
As for the buyers, they are also at an inconvenience. They may have scheduled remodeling repairs and movers and may now have to wait for the close of escrow as well. This real estate market is witnessing numerous amounts of properties exceeding the closing deadline.
As a seller or buyer, the only thing you can do is be patient and trust that all parties involved in the transaction are doing everything in their control to close escrow. Lending institutions and are ultimately looking out for their interest in order to prevent loans from going bad.
Dear Michael: I am moving out of state and am taking all my furniture with me. I have been told that a house shows better with furniture. Do you think that I can get more money for my house when furnished?
Answer: Generally, it is better to have some furniture in the house. That way, prospective buyers can easily imagine how it will look when they move in. A home with too much furniture can have the opposite effect and leave a buyer confused and not knowing how to re-arrange his/her furniture.
If you have to move out before you sell your home, consider leaving some furniture behind to help give the house a lived-in feel. If you can afford it, there are companies that will furnish and decorate your home and make it ready for showing when it is listed for sale. This process is called “staging.”
Whatever you decide to do, note that some furniture is better than no furniture and no furniture is better than too much furniture.
Michael Kayem is a Realtor with Re/max/Execs, serving Culver City and the Westside since 2001. Contact him at (310) 390-3337 or homes@agentmichael.com.