Wednesday, March 10, 2010

15 WAYS TO KILL A DEAL, FHA-STYLE

In a market where foreclosures have presented some of the best values, there have been the inevitable challenges of working with banks.

Like, they won't fix anything.

For an investor, buying a property in "as is" condition may not be such a big deal, but with first-time buyers increasingly relying on FHA financing, it is a big deal.

In addition to a home inspection, FHA requires an appraisal process that not only seeks to determine value, but ensures the home is "move-in ready".

FHA guidelines identify 15 items an appraiser must flag in an FHA appraisal, all of which can drive a deal into the ground if not dealt with properly.

Here's the list:

 1.  missing handrails
 2.  lack of running water
 3.  plumbing leaks
 4.  cracked or damaged exit doors that are otherwise operable
 5.  cracked or broken window glass
 6.  defective paint surfaces for homes built prior to 1978
 7.  rotten or worn out counter tops
 8.  damaged plaster, sheetrock or drywall and ceiling materials
 9.  poor workmanship (a category that is wayyy to subjective)
10. trip hazards (heaving sidewalks, poorly installed carpeting)
11. trash or debris in crawl space (fire hazard)
12. lack of an all-weather driveway surface
13. inadequate ingress/egress from bedroom windows to exterior of home
14. leaking or worn out roof (again, subjective opinion)
15. evidence of structural problems

As more and more agents and buyers are finding out, FHA deals are not for the faint of heart. The good news is that good agents can still work together to solve problems, but it takes teamwork and commitment to get the job done.

Now, more than ever, who you are working with makes all the difference.