Sellers agent is against using an FHA loan

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Sellers agent is against using an FHA loan

Joshua King
Member since 2020 · 17 posts · 2 votes

Hi First time buyer here. Im giving an initial offer on a duplex and my agent says the seller is against me using an FHA loan. According to the sellers agent the house won't pass due to paint chips. Has anybody worked with an FHA inspection/ Appraisal and can shed some light on what that looks like?

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Matthew Irish-JonesBusiness Member
Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
4y

@Joshua King an FHA appraisal stays with the home for a period of time. If the seller pulls the home off market to fail an FHA inspection he has lost time and potentially money and has an appraisal that will stick up the home.

He doesn’t want to fix the paint because he doesn’t think he has to. He believes he will get a conventional or cash offer that is either with no inspection or he feels he will be able to negotiate through it.

There is no negotiation (typically) with an FHA inspection. Issues have to be resolved. Sometimes the buyer will handle the issues but in this situation it sounds like the seller doesn't want to risk it.

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  • Josh Cousineau
    Real Estate Agent · Auburn Maine · Member since 2020 · 40 posts · 14 votes
    4y
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  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    4y

    As others have mentioned look into a low money down conventional loan. Your offer will look a lot more favorable to sellers going conventional vs FHA.

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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    4y

    I am personally not against FHA. However, FHA 3.5% is very difficult to get an accepted contract in this highly competitive Red HOT Real Estate Market across the major metros in the country.

    I will suggest you get a 5% Conventional Financing. It will give you some leg up.

    As an Investor-Agent in the Houston, Texas market, most of the sellers are not accepting FHA Financing Offer.

    I see this happening all the time.

    Good Luck

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  • Jeremy Komer
    Rental Property Investor · Cincinnati, OH · Member since 2020 · 84 posts · 81 votes
    4y

    @Joshua King

    Your local municipality might have a lead paint abaitment program or at least some recommendations. Call the building code department and see if they can point you in the right direction.

    Cincinnati will pay for it 100% if you agree to rent it to someone making more than 80% of the zip code average income for a few years.

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  • Bob E.
    Queen Creek, AZ · Member since 2014 · 2k+ posts · 1k+ votes
    4y

    I have agree with Marcus.  There is a reason the property has not sold in 225 days.  Have they had prior offers?  If so those buyers may have done inspections.  Sometimes sellers will share the results from that, sometimes they won't.  Either way you still need to get your own inspection but knowing what issues scared off other buyers can be helpful and can save you a few hundred dollars to have an inspector come out and tell you there is a total deal killer.

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