Dear Michael: I am selling my home and received an offer from a buyer with an FHA 3.5percent down payment. My house is in need of 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 (Federal Housing Administration) loan approval, it must first meet FHA requirements. FHA appraisals occurring on or after January 1, 2006 require repairs for conditions that rise above cosmetic defects, minor defects, or normal wear and tear. Appraisers must report ALL deficiencies but lenders can use professional judgment and prudent underwriting practices to determine when a property’s condition is a threat to safety or jeopardizes structural integrity. 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 close. If your home has been sitting on the market for a while with no offers you may want to take your chance with your FHA buyer. Keep close attention to your contingency dates. Repairing your home before listing it, whether FHA or conventional buyer, is something I strongly recommend.
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 very common occurrence. With current guidelines lenders are reviewing every file and can request last minute documentation that can and will postpone the sale and close of escrow. If you have planned moving 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 extended close of escrow as well. As a seller you can demand the buyer close escrow. If buyer fails to close escrow within the time you specified in the demand, you can then cancel the purchase agreement. Be sensitive to the buyer’s situation as long as they are trying their best to close. It may be beyond their control. Some lending institutions are insensible to the parties in the transactions and ultimately are 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 a higher value 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 not knowing how to re-arrange their 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”. Your Realtor is also a good source of advice if you are unsure with what furniture to keep. 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
