Your Offer With VA or FHA Financing
If you are looking to buy a DFW Home and you will be obtaining VA or FHA financing then you must include that information in your offer. This is necessary because these government loans place additional financial and performance obligations on the seller that are not typical with cash or conventional loan purchases.VA and FHA loans prohibit buyers from paying certain types of fees that are often charged by their lenders and title companies. They are called non-allowable fees. They will still be charged, but as the buyer, you are not allowed to pay them. This means that the seller will end up paying them instead of you.Most of these non-allowable fees are fees payable to your lender. Prior to submitting an offer on the home of your choice you should have already been pre-qualified by a loan officer and that loan officer should have told you what the non-allowable fees will be. Experienced DFW Realtors should also have an idea of what non-allowable fees will be charged by the escrow agent and title insurance company. Since these are fees the seller would not pay on a cash offer or an offer with conventional financing, this information must be included in your offer. You should realize that since the seller will be paying these additional fees, they may be a little less negotiable on the sales price.Appraisals on VA and FHA loans are a little more involved than on conventional loans because they include an inspection element and they are also more expensive. These appraisers are required to perform certain minimum inspections, which are generally safety items, as well as evaluate the value of the home. Although these inspection reports are not as detailed as a typical professional home inspection report they can uncover items that need repaired prior to closing. These additional repair costs are cost the seller would not be obligated to pay for someone paying cash or obtaining conventional financing. Because of this your offer should include a maximum figure, or cap, for these repairs. Whatever figure you put in will likely affect the seller’s willingness to negotiate on their sales price. If you put $1,100 as an estimate, the seller may be $1,100 less negotiable on their sales price. If no repairs are necessary, you may have been able to get the home for $1,100 less than what you and the seller originally agreed on as the sales price. When searching for it is best to retain the services of a professional DFW Realtor. Your Realtor can discuss with you the possibility of buy a to locate a good deal for you. Some of these foreclosures, however, may not be good candidates for VA or FHA financing programs as many times they need a lot of work, work a bank is unlikely to do. If you are not using a Realtor in your search of DFW homes you may consider a understanding that these FSBO sellers probably have no idea if their home can be financed under one of these programs.
Comments