Selling Your Home to a Buyer with FHA or VA Financing
Article by Deb Staley ©2023-2024
A popular home loan program with veterans is a VA loan and a common loan program for first-time homebuyers is an FHA loan. As a seller, with all things being equal, your best offer is from a cash buyer. The next best offer is from a buyer with a conventional mortgage loan. Selling your home to a buyer with FHA or VA financing involves extra steps that may cost you more money. This is my own opinion based on my experiences as a Johnson County, Kansas real estate agent for many years.
It is important to understand that we are still in a seller's market, due to lack of inventory.
With an FHA or VA loan, their appraisal adds another step, which is like a mini inspection. So, it isn't just the sales price of the home that is under appraisal; the condition of the home also comes into play. Some sellers may be unable or unwilling to correct items that an appraiser may call out. You just never know, and that is why some sellers are reluctant to accept an offer with that type of loan.
What I do see--and it is heartwarming--are sellers who are veterans themselves who wish to help another vet. They are willing to deal with the loan uncertainty. The VA loan program is an absolutely outstanding benefit to our veterans. It simply cannot be beat. The best place to learn about this is on the official government website: https://www.benefits.va.gov/homeloans/
Another issue that often crops up with these types of loans is that buyers will ask for closing costs and prepaids. Since we entered the seller's market, this is no longer common. It is not unusual to see a request for the seller to pay as much as $8,000. As with any offer, this is entirely up to the home seller to accept or decline.