Buyer wants to change from conventional loan to FHA

[Bryan Lee]

We are in a pretty competitive market right now and we accepted an offer from a buyer who is acting as his own real estate agent. He had the inspection and we just agreed to make repairs based upon the inspection report. Now all of a sudden he wants to switch from a conventional loan to FHA, he says he can save $130 if he switches. With him being a real estate agent and knowing that the market is extremely hot right now I feel like he knew this prior to making the offer because he knew that conventional offers would get accepted easier rather than FHA. Has anybody dealt with this situation before, or think there is any issues with switching the financing this far along? I've heard FHA loans usually appraise lower than conventional. I was thinking of asking for 2,500 toward low appraisal and a compromise for accepting the financing switch. Any input would be greatly appreciated.