When considering offers, sellers should really pay attention to the loan type. It might not seem like that big of a deal, but a FHA Mortgage can be a lot more complicated and costly from a sellers perspective.
One of the big nuisances with FHA loans is the FHA appraisal. The FHA appraisal isn't just concerned about the value of the home, but they also have ridiculous requirements to ensure safety of the property. In most cases, the seller of the property is required to make these repairs. Some of the things I've seen that FHA appraisals won't allow include: missing light bulbs, holes in the wall, loose handrails, exposed wiring, chipped paint, and trees that are too close to the house. An FHA appraser also can't approve a house unles the power and utilities are on.
So, you can't really sell a property "as-is," if you want to accept a FHA loan. FHA loans also require more paperwork at closing. FHA loans can be a pain to deal with, so if you have multiple offers, make sure you take the type of mortgage loan into consideration.
Why is it so hard to get an FHA loan for my buyer?? The houses my client is approved for will certainly need some work. Okay, he's approved, the bank can and wants to loan my client the money. This person will add value very quickly to a home it closes and make needed repairs quickly. I know FHA is trying to protect themselves and the buyer--but, I have lived in an 80 year old house since birth and I know there has been some chipped paint! This person works very hard, deserves, needs, and wants a house, but FHA is keeping this from happening. Why is it that anyone, upon seeing some of these potential homes, would move right in--with only a little cleaning of course. Why can't FHA see past this? I recently found the perfect home--worth more than asking price and actually in very good condition--just some chipped paint on some wood trim outside. So, my client has to move on, not in because of FHA and the "as-is" issue and no repairs can be made. This issue could be solved with about 3 hours and a couple cans of paint--does this seem fair or logical??!!