Susan Terry

The problem seems to be that all my buyers now want to use FHA financing, but they are also being tempted by a huge number of foreclosures, short sales and other sellers who don't have the money to make repairs to a home before it's sold. FHA won't insure loans for homes which aren't in good condition ... and the banks in charge of approving short sales and who are handling foreclosures won't spend any money to get them in good condition. It leaves me trying to figure out which properties I can even show my buyers ... trying to figure out before I get in the car what condition the property is in and what will and won't be a problem when the appraiser comes. I can't walk a roof to see if it's got 2 years life left in it before I show it to a potential buyer. I don't know if it has peeling lead based paint until we get out there. The FHA appraiser usually comes after the inspection deadline has passed and my buyer has already paid for an inspection which was for his "informational purposes only." Often times the buyer has had to pay to dewinterize a property, rewinterize a property and turn on utilities just to have the inspection done. Then the FHA appraiser decides to make a list of things which need to be repaired first. No one has the cash or is willing to make repairs to a property prior to closing. My mortgage broker has been known to fix peeling exterior paint prior to closing or put in a used stove -- but when it comes to a roof with less than 2 years of useful life, then we need to move on. Maybe the government should put all the out of work contractors to work fixing up the "as is" properties per FHA guidelines so FHA will approve more homes for purchase. The FHA guidelines do seem to be a lot more flexible than they used to, but many of the older listing agents still remember all the nightmares -- you mention FHA or VA financing and they look like deer in headlights -- if there are competing offers, I'm always turned down in favor of some one w/ conventional financing.