FHA has tightened up on what they will approve. If there are any questions about lead paint, potential water leaks, damage of any sort, or substandard heat, utility, or electric, then FHA may require exhaustive and potentially expensive work be done by outside contractors. FHA appraisers require a property to be up to the higher standard or they will not authorize the BANK to give the buyer an FHA loan.
Many sellers -and agents for sellers- do not want to deal with the lost time and potential expenses involved with trying to get a buyers FHA appraisal approved. If the seller's agent .... or the seller.... is not interested in getting a home FHA approved in advance, or in taking the chance the property will be rejected by FHA, they can sell it to any buyer who is approved for a CONVENTIONAL Loan. There are a lot of buyers who can get a Conv. Loan. It is the sellers choice to accept an offer with a financing contingency of any sort - FHA or Conventional or VA. On not. A seller could theoritically refuse all offers except cash.
If the listing agent stipulates the property will not go FHA what they are saying is that the seller is not going to sign an offer with an FHA financing contingency. It could be the property would be FHA approvable.... but they are taking a risk by agreeing to an offer with an FHA requirement......If they signed it they could shooting themselves in the foot. On the other hand there are FHA sales which have fallen through because the seller could not or would not spend thousands of dollars to upgrade a property, and the result was the buyer was out the cost of the appraisal, lost the house, and maybe lose some chances at other homes in the meantime .
Dan and Lida Deutsch, CRS, Buyers Agents
Thursday, June 25, 2009
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