Dear Michael: I am selling my home and received an offer from a buyer with an FHA 3.5% down payment. My house is in bad shape, it needs a new roof and many 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. Repairs 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 may have to bring more money to the closing table. Chances are that your home with the repairs you mentioned will probably not meet FHA guidelines.
Dear Michael: I sold my home and was supposed to close escrow 3 days ago. Now we are told 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 common. With the current guidelines lenders are reviewing files and can request last minute documentation which may delay the close of escrow. If you have 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 probably have scheduled remodeling repairs and movers and will now have to wait for the close of escrow as well. If the delay goes over 1 week and you can no longer wait you can serve the buyers with a 3-day demand to close escrow. If the buyer does not close within the 3-day demand, you can cancel the agreement. Keep in mind that you will have to start the selling process all over again. I suggest you stay patient and trust that all parties involved in the transaction are doing everything in their control to close escrow. Fact is, lending institutions are insensible to the parties in the transaction 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 I 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 live-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 Estate Properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com