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Health & Fitness

FHA Appraisal Repairs

Last week we talked about appraisal issues.  Let's continue that theme this week.  Sometimes appraisal issues aren't just about price.  For example,  there could be repairs involved with the sale of your house.  Depending on the offer that you accept when you sell your home you could have a variety of repairs to look out for.  For example if you accept an FHA offer on your property you could face some issues if you have any sort of chipped or peeling paint.  Another snag for FHA loans could be sunken or cracked concrete.  You can find more information regarding FHA guidelines HERE.  

So what happens if we get the appraisal back and there are repairs needed?  When the buying agent submitted the offer there is an addendum called the FHA addendum.  On this addendum,  it states if there are repairs to be made who is responsible for them and who goes first.  Here is an example.  The seller agrees to pay up to $500, and the buyer agrees to pay of to $500 toward FHA repairs, and the seller will go first.  Or the buyer will go first.  If it exceeds the noted amount, then you will have to renegotiate the contract.  Another thing to keep in mind is that FHA appraisals stick to a property for six months.  So lets say the appraisal comes back way too low, and there are repairs to be made.  The seller doesn't have to sell the property and can place it back on the market.  However he wouldn't be able to sell it FHA for six months.   Today we are in a sellers market.  A buyer needs every possible advantage to secure a home.  Most sellers are going to take a Conventional Loan over an FHA loan every day of the week because the guidelines are a bit easier.  That's not to say that going FHA is bad it just makes it a little more difficult when bidding against a Conventional offer.  One thing to keep in mind is that, as your shopping for your home, you should be keeping your eyes peeled for potential FHA repairs.  If you see that the driveway is going to need to be replaced, you may want to consider offering on a different house or switching to a conventional loan or a loan that allows you to finance repairs like a 203K loan.  
No Realtor can guarantee someone that a home is going to pass the FHA guidelines, but there are some pretty common repairs that you should be on the  look out for.  The last thing you want to do is spend your hard earned $$$ on an inspection and an appraisal only to find out that you won't be able to get a FHA mortgage on the property.  If your looking to sell a home......buy a home.....or invest in real estate contact me at www.christaylor.kwrealty.com I would love to help!  Keep your eyes peeled for potential FHA repairs and happy hunting. Hasta la wego!

Chris Taylor
Keller Williams Macomb
586-524-1095
Chris.taylor@kw.com

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