All Forum Posts by: Karin Crompton

Thanks again for the great input. A brief update: buyer's mortgage broker confirmed that he has been through underwriting and pretty much everything but an appraisal has been done; also, that he qualifies for the USDA program. We also spoke to someone from the regional USDA office who filled us in on some particulars of the program. Sounds like turnaround time could still be a bit of a mystery, with the biggest potential delay coming with appraisal. He did say things are slow right now, which is good for scheduling. The buyer's mortgage brokerage is an approved appraisal company for USDA and the property is indeed within the approved area. Buyer himself is not yet in the USDA system, but that's not unusual.

With that in mind, and after doing a little more homework on our own to see what we could learn regarding the buyer, it looks like he's a solid, serious buyer - with plenty of income, but apparently still within the guidelines - and so we sent along our counter. We countered on the purchase price itself, earnest money deposit, closing costs and closing date. Oh, and we made sure to add in a date for mortgage commitment, of course. :)

I believe the process is that buyer will receive an approval/commitment from the mortgage broker, who will then send the info to the USDA for their review, which is essentially a paperwork thing to formally accept him in the program. So we specified that the commitment date is USDA commitment. Our hope is that the buyer and his agent will keep on top of the local mortgage broker to get their part done asap and sent to USDA. If everything is as straightforward as it currently looks, our biggest questions would seem to be USDA expediency, what the inspections are like (I'm new enough that those always make me nervous, no matter how good the property), and the appraisal.

Interesting points all around, thanks. @Greg H. we do have a pre-approval letter in which it appears the broker has done some underwriting. However, it doesn't reference the USDA loan. I wonder if, in our counter, we ask that the pre-approval letter state what you've mentioned. And @Bill Gulley I like the idea about calling the local office. Consider that on our to-do list.

We were wondering about the income limits - again, this is a 300k+ house, not a first-timer thing. Either I should be concerned about a buyer not having a reasonable amount of deposit money for a property of this type, or else he's simply a guy taking advantage of a no-money-down product. We sold a house a couple of years ago for 270k to buyers who had plenty of income, but simply took advantage of a VA loan where they didn't have to spend any money out of pocket.

Thanks, @Sandy Thomas ! I will definitely double-check the map, though I think it's likely considered rural enough. We're using a Realtor to sell this listing and he tells us that he checked with another agent who's been working these kinds of loans and said the turnaround, once the file is sent to USDA, is about 10 days. Hopefully that's accurate and just means we need to make sure the local mortgage broker gets things done in a timely manner.

Thanks, @Phillip Tillotson , that's helpful. When you say the property needs to appraise for the loan amount, including extra USDA costs, what costs are you talking about? And are there any restrictions on the amount of the deposit? This is a house at a price point (300k+) where I'd expect a buyer should be able to come up with some type of deposit.

My biggest concern is in regards to the process more than the numbers. I don't want this thing to drag out for months or for the property to be off market for 8 weeks, only to find out it falls through for some convoluted bureaucratic reason. So if I can find a way to make sure the process is pretty smooth, I'm fine with it even if it's a little more cumbersome than a traditional loan.

Thanks, @Richard C. . I'm leaning toward that scenario. Property hasn't been listed for very long and is a good one, so I'm very ready to reject it or be especially tough in negotiations. The only saving grace is that the offer price is a decent one; I'm not so sure it's worth the headaches, however. A minor headache, maybe, but not a large one.

Hey all,

We received an offer on a property today in which the buyer is using a USDA loan, a product I'm not very familiar with (but will learn). To cut to the chase, is USDA similar to a VA loan in that the buyer is essentially prohibited from putting any money down? Aside from the offer price, there's not much else that's good in this offer - buyer is putting down next to nothing for an earnest money deposit and wants 9k in closing costs, plus he hasn't specified a mortgage commitment date. Ummm, NO.

The offer just came in so we haven't replied or countered yet. I'm trying to read up on this type of loan but haven't found the specifics I'm after. In particular, I want to know whether we can require a more traditional deposit; whether USDA makes the seller pay for closing costs or whether we can negotiate that point; and how much of a stickler we can be on the date for the mortgage commitment. I would typically put in 21 days (a la @J Scott and his tips for closing success) and then they'd have to make a heckuva good case to extend from there.

I'll leave it at that for the moment. Thanks for any insight!

Hey, @Account Closed said ... feel free to ask about specifics here in this thread or via message.

Welcome, @Anton Reed! Sounds like you have some valuable knowledge. Are you still doing insurance? I'm not too happy with mine and have been talking about switching. I'll DM you.

I'm in! Looking forward to it.

Hey all, I think the OP points out that this is a college student rental. I wonder how and whether that changes the equation? Are you better off with carpet than with refinished floors in that situation? I do flips and we always go with hardwoods, but I wonder what the landlords here have to say.

(and btw, I will echo what @George Paiva says regarding pricing - CT is about $2/sf, sometimes $2.50 ... and seeing as how we're a more expensive state than almost anybody, I'm thinking you can do it for that price or less in the Scranton area.)