So you want to buy a house, but you need FHA or VA financing. How do you
compete with cash offers? Today I want to go over a few tips on how financed
offers can compete with their cash counterparts.
Why are cash offers even desired in the first place? The main issue is that
financed offers require both an inspection and an appraisal. In today’s crazy
market, a lot of buyers are waiving these to make their offer more competitive,
but you don’t have that option if your offer is financed.
“Navigating this market can be tricky, so make sure you hire an experienced professional."
Things only get trickier when you use an FHA or VA loan. According to a recent
survey, 90% of sellers would accept a conventional loan, but only 30% would
accept an FHA or VA loan. If these numbers make you nervous, don’t worry; I
have some great tips to make your offer more attractive, even if you’re using FHA
or VA financing:
1. Pick up the tab for repairs. Once again, the main hurdle you have to
overcome is the inspection and appraisal. Since they aren’t optional withfinancing, why not tell the seller you’ll pay for any repairs that need to be done?
If you assure the seller you’ll take care of anything an FHA loan would require to
be fixed, then you can make your disadvantage disappear.
2. Pay the difference of an appraisal gap. If the home appraises low, yourlender will only give you the lower amount for the home. While every lenderis different, some will let you pay the difference in cash. So if you agree to a
$300,000 price and the home only appraises for $290,000, you can make up
the $10,000 difference yourself to reassure your seller. Every lender is
different, so ask them if this is an option you can use.
Offer an incentive. This one will be different for every buyer, but you can
always offer an incentive. It could be allowing the seller to remain in their
home while they search for a new one or something like offering a boat you
don’t use as part of the sale. No matter what, always talk to your lender
about your options and the conditions of your loan. If you do something
you weren’t supposed to, it could come back to bite you later.
If all these options sound tricky to navigate, it’s because they are. That’s why you need a seasoned real estate professional to help you figure out what options are best for you. If you need a local expert, give us a call at (423) 593-5588 or email us at cmabry1112@gmail.com. My team is always willing to help!
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