No FHA or VA financing? Recently I’ve seen several property listings state in the Broker’s remarks (area that the public can’t see) that the Sellers will not accept offers with FHA or VA financing. Do these Sellers realize that they’re possibly ruling out 95% of the market by not accepting that type of financing? 
I’m shopping in a range for first-time home buyers who will typically have FHA or VA financing. I’ve explained to my Buyers that if they choose an “as-is” property, they will be responsible for whatever repairs may be required by the type of financing they choose. They understand that and we’ve steered clear of properties that will require more repairs than they can afford.
Years ago, there were more financial costs for the Seller when accepting FHA or VA financing, but those costs are truly insignificant now. Repair costs can be negotiated and the prospective appraisers are not as stringent as they once were.
Remember that FHA and VA appraisers are looking for safety and health issues. They don’t care if your dishwasher doesn’t work or your air conditioner is old – they care if the hot water heater needs to be raised or if there is chipped and peeling paint.
Come on Sellers – don’t turn away such a large portion of your potential market!
Lori is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa area, including midtown Tulsa, downtown, Owasso, Sand Springs, Broken Arrow, Bixby and Jenks. Visit Lori's web site, LoriCain.com or call 918-852-5036 today!
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Lori is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa area and specializing in downtown Tulsa and midtown Tulsa real estate.
I do not see this as often as before. Now I mostly see it on homes that are in disrepair.
Lori, is it possible that these disclaimers are on the listing because there are issues with the home that would rule out the possibility of FHA/VA financing?
For years there was a nice condo complex in my area that had the right of first refusal in their bylaws. That automactially ruled out FHA, so listing agents often put it right in the remarks.
If, however,this is a case of sellers not understanding FHA/VA and perhaps being intimidated by it, then they need to be educated!
FHA appraisers here seem to be looking for more than just health and safety issues. Either that, or everything in their book is a health and safety issue. It's getting really weird with them.
We don't actually get that posted much, but the FHA buyers are definitely at a disadvantage agains the higher downpayment buyers. It is a shame and very frustrating for first-time home buyers.
Frank - I'm beginning to see it more on properties that would come CLOSE ENOUGH to passing FHA that they shouldn't rule it out.
Lisa - I think it's a case of Sellers not undersing FHA/VA.
Rusell - in our area, they pretty much just check the hot water heater and may glance at wood rot.
Jane - our 1st-time home buyers are making the 3.5% down payment and asking Sellers to pay closing costs - that's the norm.
Every now and then I come across sellers who do not understand FHA and are afraid of it. Last year I had a seller client who received a full priced offer on her home + 6% for down payment assistance. She flatly turned it down, despite being advised to just pay attention to her bottom line. She sold the house a year later with someone else for almost $15K less, but hey! It wasn't an FHA loan! <insert eyeroll here>
The home would have to be is seriously bad sha[e for someone not to take VA or FHA. like a fixer-upper. Even in short sales we take FHA and VA here with the counter contract that states any FHA or VA requirements are the responsibility of the buyer before closing. It's an FHA world out there.
Hi Lori! Honestly, this is their AGENT talking here--they've filled the seller's heads with horror stories and the sellers don't realize that they're eliminiating over 1/2 of their buyers when they post this limitation on MLS. Don't you wish you could get the word out to the sellers so that they would know the REAL truth?!
I've had numerous FHA sales during the last couple of months and the inspectors are FAR less demanding than they were years ago, the loans go through without a glitch and Closings DO occur--all of them for my buyers and sellers! So, I don't know what the fear is all about!
Have a great week...
Sounds very strange. I guess it may be good reason to wonder what is wrong if they feel the property will not appraise or something like that. FHA is, well, like you said, 95% of the potential market. If they turn that away they are only hurting themself.
Ugghh, Lisa -- that hurts!
Joe -- yes, it's an FHA world -- that's why I don't understand why Listing Realtors are not better educating their Sellers!
Debe - they're eleminating more than 50% of their Buyers. Maybe we should start writing blog posts about FHA financing and direct them to the consumer (Sellers).
John - preaching to the choir, I know!