Selling house

[fisher83]

Looking for opinions on this. Looking to sell our house and upgrade to a bit larger one in the coming months. It’s in good shape but it’s not a high dollar property. Value is probably $105k or so. Owe about $80k. What are your thoughts on listing the property for sale and only offering conventional financing or cash? I’d prefer to take FHA out of the equation as I’m not dealing with a whole lot of equity here and I feel like FHA financing will attract buyers who are bringing next to no money to the table and will want me to pay for any nitpicky stuff the FHA appraiser finds before they will fund the loan.

 

[CKN]

Originally Posted By: fisher83

Looking for opinions on this. Looking to sell our house and upgrade to a bit larger one in the coming months. It’s in good shape but it’s not a high dollar property. Value is probably $105k or so. Owe about $80k. What are your thoughts on listing the property for sale and only offering conventional financing or cash? I’d prefer to take FHA out of the equation as I’m not dealing with a whole lot of equity here and I feel like FHA financing will attract buyers who are bringing next to no money to the table and will want me to pay for any nitpicky stuff the FHA appraiser finds before they will fund the loan.

just sell the house as is. If you do any buyer will know going in what (not) to expect.

 

[AZjeff]

Aren't most buyers going to have a home inspection done and find the same nitpicky stuff or is FHA different? How many nitpicky things can you fix yourself now? If you list with an agency and sell at full $105K the commission is going to be $6300, plus normal sellers costs you're going to net around $16-18K. Lots of good info online about how to present a property.

 

[fisher83]

If I understand it correctly with conventional financing it is a little easier to come to agreeable terms with the buyer directly as to whether or not repairs will be made or whether a price reduction can be made in leui of the repair, etc. With FHA they can require repairs to be completed before they will fund the loan. I’m replacing carpet and painting. My line of thinking is that by eliminating FHA as an option I would be dealing with less potential buyers but they would presumably be more qualified ones.

 

[csandste]

I'd let any and all parties give you an offer. If the FHA is three thousand more it might not be worth the hassle, but what if it's ten grand more. Let the market do its work. You don't have to accept.

 

[Wolf359]

I don't even know what you mean and I'm a real estate broker. The buyers will make the offers. You can read the offers and just reject the ones that have FHA financing. They should present pre-approvals with the offers. FHA can be ridiculous though. Did one where they wanted hand rails installed on the basement steps. It already had hand rails, appraiser didn't have it in the pictures. Told them it already had them. Then they wanted receipt for the work that was done. Told them no work was done, it already had them. Then they wanted some statement that it was existing and that no work was done so no one was owed any money. Had the seller sign that form and they were happy. You do not disclose that you won't take FHA. Might scare away the conventional and cash people. You just reject the FHA offers. Counter them for more money or insist that they pay for any issues that FHA may have. The lawyer/broker will work it out.

 

[Stevie]

I started off selling my home by owner. All kinds of agents came out of the woodwork saying they would have better results and wanting my listing. Unfortunately I gave in and when with one of the big name real estate agents. Then nothing for the 6 months they had it tied up. Put for "sale by owner sign out" "$122K or $126K if you use an agent." Sold with in 2 weeks and had 2 offers, no agent involved. So I didn't have to pay any commission. The Title company does all the work. That is where the closing happens. Those real estate agents are just in the way, or at least were in my case. I would never use a real estate agent again.

 

[fisher83]

Lots of good tips here. Thanks everyone!

 

[demarpaint]

Originally Posted By: csandste

I'd let any and all parties give you an offer. If the FHA is three thousand more it might not be worth the hassle, but what if it's ten grand more. Let the market do its work. You don't have to accept.

Exactly. You can reject FHA offers or as already mentioned make the buyer pay for anything FHA requires. When I sold a rental property I told the broker to take it out of his cut, I wasn't putting up railings or replacing a perfectly good hot water heater because of its age. The broker wasn't happy, but I didn't pay, and quite frankly I didn't care. I told him to get me another buyer if he wasn't happy, or end the contract and I'd sell it on my own. I priced the house as is, and we both knew exactly what it neded. That was made perfectly clear when I sat down with the broker before listing it. I told him I didn't want to hear any of that nonsense. He paid for railings and a hot water heater.

 

[Mr Nice]

Take Wolf's great advice.

 

[Sierra048]

In 2015, after my mom and dad passed away, I was their executor and responsible for selling their 65 year old home they purchased new. It was in an older neighborhood. The house was not in the best shape due to my parents health and income limitations. I wasn't sure what the house was worth (I just guessed, maybe $60k). My cousin suggested a realter she new and I went and talked with her. I told her the house was to be sold as-is and any offers should be made with this caveat. She looked at the property and said she thought she could get $80k for it. I was doubtful. After two days on the market, I had eight offers. I couldn't believe it. There was an actual bidding war on their house. So, three days after my dad's funeral, I left town with a signed contract for $97k. I don't I'll ever understand the real estate market.

 

[gathermewool]

Are FHA inspections similar to VA loan inspections? If so, that might not mean much. Our home inspector went through before the VA appraiser, and we asked him to point anything the appraiser might find, so we can get a head start on negotiating who would take care of each item. We got a list of things that could have cost a few grand to fix right then and there, but I did not feel needed to be at the time of purchase (especially for the price.) Anyway, long story short, our inspector was incredibly thorough. The VA appraiser showed up and apparently only spent around five minutes in the place. He found a total of zero things to fix and appraised the house for $10k over the closing price...

 

[Wolf359]

Originally Posted By: gathermewool

Are FHA inspections similar to VA loan inspections? If so, that might not mean much. Our home inspector went through before the VA appraiser, and we asked him to point anything the appraiser might find, so we can get a head start on negotiating who would take care of each item. We got a list of things that could have cost a few grand to fix right then and there, but I did not feel needed to be at the time of purchase (especially for the price.) Anyway, long story short, our inspector was incredibly thorough. The VA appraiser showed up and apparently only spent around five minutes in the place. He found a total of zero things to fix and appraised the house for $10k over the closing price...

They can be, depends on the appraiser. They seem to care about railings, that always seems to come up. They're only going to pick up what they can see in 5 minutes, they're not going to tear into the heating system to see how good it is or open up the electrical panel to check for rust or double taps. The main problem with them is that the buyers tend to be shaky because you just need 3.5% for a down payment. And the other reason is that it can take a lot longer than a conventional loan, but I've seen them close on time so it's possible. It basically boils down to if you don't have any other offers and you want to sell, you just take them and keep your fingers crossed.