So you have decided to sell your home. When your realtor takes a look at your home, one of the things they have to look for is to see if your home will qualify for an FHA loan. FHA loans require an inspection to make sure the home is “move in ready,” making it more difficult to qualify for than conventional loans. While the realtor is not a licensed inspector, most experienced agents can look at a home and tell if it has a chance of passing an FHA inspection. As a home seller, you may be wondering why you should even care.
Why does it matter?
In the Chicago real estate market, a lot of first time homebuyers will use an FHA loan. They only need 3.5% of the purchase price for the down payment, so that makes it easier for people to qualify, which in turn puts more buyers in the market for your home. If your home doesn’t qualify for the FHA loan, you take away all of those buyers, who now are not able to buy your home. The fewer buyers your home qualifies for, the harder it is for your home to sell.
What should I look for?
As mentioned before, FHA loans require that the home is in “move in ready” condition. They are looking for any potential hazards that might exist for the homebuyer. One of the common hazards is a basement foundation that has a crack in it. This can often lead to water leaking in the basement, and can also cause mold to grow in the basement. If there is mold in the basement, make sure you find the source of the water leak and remedy the situation. They also check to make sure all of the living areas in home have a sufficient heat source, so make sure your furnace or boiler is working properly.
A lot of older homes (built before 1978) used lead based paint. Because of this, inspectors often check for peeling or chipping paint, which could expose the homebuyer to lead. This can easily be remedied by repairing and painting over the area. Another thing they may check for are loose handrails or loose stairs, which would need to be repaired. Lastly, make sure you check your roof, and fix any visible leaks or missing shingles. Of course, I am not a licensed inspector, but doing these things will take you a long way for qualifying for FHA.
What are my options if it doesn’t qualify?
If you don’t think your home will qualify for FHA, there is still hope that you can sell your home at a good price. You will have to make sure that you adjust your price to account for the repairs needed to make your home move in ready. You also have to make sure you choose a strong agent, such as myself, to market your home. You have to get your home in front of the remaining pool of buyers that qualify to buy your home.
Any questions or thoughts, feel free to contact me today!