When you are selling your home, there are a lot of things to worry about. Generally, we don’t consider the type of financing that the buyer will use. Why should we? After all, we’re not the ones applying for the loan!
But considering financing is a proactive approach to selling your home. And it is one way to provide an advantage in the market.
Consider this: you receive an offer on your home and everything looks great. But then the appraisal comes in. You find out that your home does not meet the minimum property requirements for the proposed financing. Now, in a scramble, you are hurrying to take care of the appraisal issues before closing. Or, worse yet, the issues are something that cannot be fixed in time and you lose the deal altogether.
What can you do?
With regards to financing, it starts with a choice. Will you consider all types of financing? You have the option to state that you will only accept offers of cash or conventional loans.
But that will severely limit the number of people that can make an offer. According to data from the Intermountain MLS, in 2017 over 30% of single family homes were financed via FHA, VA, IHA or RD loans. That is a big chunk of potential buyers that you would be eliminating.
Sales is a numbers game. Selling your home is no different. The best way to get what you want for your home is to show it to as many qualified buyers as possible.
To get the most opportunities, consider opening up to all financing options. Make sure your home is ready. That means understanding and preparing to meet minimum property requirements. By utilizing the checklist below (often called the FHA appraisal checklist) you will be able to cast a wider net to potential buyers.
Checking your home for the minimum property requirements
By checking your home before you list, you are taking control of your situation. And you are potentially removing challenges that you would find later on.
Here is what you can do.
Look for problems
You and your agent should look for issues that are red flags for inspectors and appraisers. This includes things like puddling water near the home’s foundation and open-ended electrical wiring. It also includes mold and mildew, or basement rooms that do not have an egress window.
Some issues are easy to correct while others may take time. The key is identifying them early. I have a list of 52 items to look for and I would be happy to send it to you.
Fix or remove the issue
An issue like a non-working appliance has a simple solution: either fix it or remove it. Issues like broken windows may take a little more effort. If you have a worn-out roof, a professional roofer can take care of it and make sure that it has the proper permit.
The key is being proactive and making sure these things don’t catch you off guard during the transaction. Rarely are there issues that cannot be solved.
Preparation is your ticket to success
The more prepared a seller is, the more likely they will sell their home smoothly while getting exactly what they want.
Decide on the type of financing you will consider.
Look for potential problems.
Address any issues you find.
Get your detailed VA, IHA, RD and FHA Appraisal Checklist here
If you want to receive a checklist of specific items to look for in your own home and see if you’re prepared, send me an email at vince @ amherstlegacy.com – It has 52 different things to look for.
I received all of this information from a Continuing Education class that was taught by Stan Audette of AAD Inspection Corp.
For a complete list of requirements, click here to visit the HUD website and download the HUD Handbook 4000.1