> INVESTORS / BUYERS
> HOME BUYING ARTICLES > ARTICLE
FHA AND VA FINANCING AFFECTS YOUR OFFER
inspections on FHA and VA loans are a little more detailed than
on conventional loans (and more expensive). The appraisers are required
to perform certain minimum inspections as well as evaluate the market
value of the property. Although these inspections are not as detailed
as a professional home inspection and should not be considered a
substitute, sometimes repairs are required.
These are additional
costs the seller would not be obligated to pay for someone obtaining
conventional financing, so your offer should include a maximum figure
for these repairs. Otherwise the seller is signing the equivalent
of a blank check, and they do not want to do that.
At the same
time, whatever figure you put in will most likely affect the seller’s
willingness to negotiate on price. If you put $500 as an estimate,
the seller may be $500 less negotiable on their price. If no repairs
are required, you may have been able to get the house for $500 less
than what you and the seller agreed on as the price. The solution
is to add a clause to your offer that goes something like this.
"If required repairs cost less than the maximum amount allowed,
the excess will be credited toward buyer’s closing costs."