Selling old house and FHA Assessors, should I worry?

Question

I am looking to accept offers on a 1890's farmhouse I have flipped but I'm hearing stories about FHA assessors finding/digging things up that will break a deal. Have you found this to be reality?

I have spent 4 years in the place fixing it up. And in the 4 years there hasn't been any structural issues. I'm not worried but maybe there are things I've missed?

If you have come across things that assessors have found that I might be on the look out for, I would appreciate the feed back.

Michael Jackman · Answer

House sold, with buyer agreeing to by as-is. It worked out great for me.

Though this was a live and flip, it took 4 years before deciding enough work had been done. The work put in was also more that I had originally planned. So, note to self, old homes that need updating require above average resources (time and money). House looked great when we sold.

But i learned my lesson!

Michael Jackman · Answer

Marc,

There are no health issues and I think you are right, it might be the appraiser, Either way, I wanted to see what the more experienced have come across and I really appreciate the help.

Just found out there is another offer that is conventional and above asking price! I think everything worked out.

Sweat equity goes a long ways when you get the right property. I will try to keep this updated with the process or I might later start a new post with all the info on this property.

Marc Winter · Answer

That's great news!  Keep moving forward!

Marc Winter · Answer

Is an assessor different than an appraiser?  I've done dozens of FHA deals, and as long as your property has no health/safety issues, adequate electric service throughout, decent roof, solid siding, handrails where needed, no cracked walkways, no termite or carpenter ant damage, you should be ok.

If the FHA lending limits in your area are at or above the sales price you are accepting, and the buyer has a strong pre-approval for mortgage, I'd let happen.  Just make sure the appraisal is done ASAP, so you will know sooner than later.

Good luck.

Michael Jackman · Answer

I currently have two FHA offers and the fact that they are FHA is exactly why I'm asking questions, I'm contemplating also declining FHA offers because of the unknown but I don't want concern to determine judgment. So thanks for your input! My realtor is subtly hinting at holding out for a conventional offer. We will see.

The house has been three days on market with 2 offers and several more showings scheduled. We will see.

Kevin S. · Answer

@Michael Jackman I've been on both the purchasing and selling side with FHA assessors, and it seems hit or miss depending on who you get as the assessor. Sometimes they nit-pick and sometimes they spend less than 30 minutes at the property and have no issues. The biggest thing I've seen them zero in on is wood-rot on the exterior, you can't have any for the FHA loan to be approved. Do you already have an FHA offer(s) or are you just trying to prepare for the possibility? I know some sellers will specifically decline FHA offers as they just don't want to deal with the hassle. Good luck with your sale!