Unconventional mortgage?


engineerkyle

engineerkyle

Member
Hi All,


We just got an offer on our house. The buyers are applying for an FHA loan. They have 10% down and our house will be PENDING for 30 days while the loan goes through.


I’m thinking of not even countering. Do most FHA loans go through?


Thanks,
Kyle
 
Can't you just tell them to come back when they have the financing but in the mean time, the house stays on the market? 10% seems low, I thought 20% was the minimum but not sure on a FHA. No reason why you should lock up the house for 30 days.
 
FHA can go with Zero down, I believe. Depends on their credit, income, payment, etc.
Did they place a deposit?
 
Never heard of this FHA place but I do agree with bwells, why basically take your home of the market on a chance that the loan will go through? What if someone were to walk up to you in 2 weeks and say hey, want your house, have 20% cash as a deposit and am already approved for X amount with my financial institution?

Not saying the would happen but I'd be telling the other people that the house is theirs as soon as they show me the money.
 
What do you mean by "pending"? Who told you it was pending? Did they tell you there were constraints while it is pending?
 
Keep it on the market, and if someone comes up with cash in hand in the mean time, the ones with the existing offer get 24 or 48 hours to come up with the cash.

That's the way we would do it here in eastern Canada.
 
engineerkyle said:
Hi All,


The buyers are applying for an FHA loan. They have 10% down and our house will be PENDING for 30 days while the loan goes through.


. Do most FHA loans go through?


Thanks,
Kyle
Click to expand...

Hi Kyle,

My dad worked for FHA for 15 years and I used to sell real estate, so I have a little experience in this area. If you have a Realtor they can find out a little more about the buyer. Like how long they have worked at the job, how stable they are, questions a lender would ask. If you have a lot of trust in your Realtor, weigh their advice.

If you accept the offer, other offers can still come in, but probably won't because no one wants to be second place in line for a house.

Consider some other factors like how long your house has been on the market and how active the buyers are in your area. It may be wise to jump on this.

Good Luck!!!! lasm
 
engineerkyle said:
Hi All,


We just got an offer on our house. The buyers are applying for an FHA loan. They have 10% down and our house will be PENDING for 30 days while the loan goes through.


I’m thinking of not even countering. Do most FHA loans go through?


Thanks,
Kyle
Click to expand...

Was the offer made at your asking price? How many previous offers have you had? How long has your house been on the market? Do you really want to sell? What terms and conditions does the FHA mortgage place on the seller? FHA normally requires an inspection and appraisal and may require seller paid repairs or interest discount points. Did your agent explain this to you?

The only question about the buyer is are they "qualified" to close the sale. The agent should have pre qualified them. The specific terms of their mortgage are between them and their lender.

Pending simply means that there is a contract pending on the property. What you need to do is have the contract reviewed by a real estate attorney, before you agree to it. It's called "Attorney review", and it's common. No offense to anyone, but I would never trust a Realtor completely. They don't always have the seller's interest at heart. (They work on commission).

Joe
 
wombat457 said:
Never heard of this FHA place but I do agree with bwells, why basically take your home of the market on a chance that the loan will go through? What if someone were to walk up to you in 2 weeks and say hey, want your house, have 20% cash as a deposit and am already approved for X amount with my financial institution?

Not saying the would happen but I'd be telling the other people that the house is theirs as soon as they show me the money.
Click to expand...

That's the way things are customarily done here. Cash deals are rare. Lenders won't commit until they see and appraise the property. FHA, is loan offered by a private sector lender, but guaranteed by the Federal Housing Administration. Lender pre approvals are conditional and ultimately follow the same practice. One is never certain the deal will go through until the deal closes.

Joe
 
Last edited by a moderator:
Just went through buying and selling myself. We did a conventional loan as did our buyers and that's exactly how it works. As soon as all contingencies other than the financing contingency were removed both houses got changed to "contingent" status in the MLS and both houses got "Sale Pending" signs out front. Our buyer's loan took 25 days and ours took about 35 due to a lower appraisal. Guy who bought my house is selling to someone doing FHA. Its taking them a little longer to close.
 
Thanks for all the great replies, guys.

In addition to the loan being FHA, the offer was about 5% lower than our bottom line. We did not counter offer.
 
BTW, those "Sale Pending" or "Under Contract" signs are solely for the benefit of the realtor...."see how good I am? Let me list your house, too." But, for the seller, they're not so great.

When we sold our last house we made sure our agent would not change the MLS listing or signage until the deal was done. We also had a rider in the contract that the house could be sold to another party up until closing. BTW, the house *did* sell, to a 3rd party, while the first "buyers" were trying to find a mortgage lender willing to give them a higher "pre-approval".

When one is selling a house in a part of the country where the "housing season" is relatively short one can't take it off-market for 30 days for a "pending" sale that may not materialize.
 
James Olson said:
BTW, those "Sale Pending" or "Under Contract" signs are solely for the benefit of the realtor...."see how good I am? Let me list your house, too." But, for the seller, they're not so great.
Click to expand...

I requested ours. Like I said, here the listing gets changed to continent whether that's etiquette, custom, rules, whatever but that's how it works here. I learned there are some other customs here people in other parts of the country think are odd too. Anyway, our Realtor hadn't put up the sign but once it was continent we were getting people knocking on the door because they couldn't find it online.
 
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