Friends selling to FHA buyer, good or bad? (sale, real estate)

[Pinehurstcharlie]

Friends house sold in 3 hours after listing to our of state buyer, never been in house. Square footage from their buy to new appraisal is about 500 to 550 more. So house value went way up. First the offer was 6500 less than asking price then they countered they'd pay the 6500 for full price. Now the appraiser for FHA just happens to be the same one they used for their appraisal (he also does the inspection For fha). Now all of this is so so fast with about a month from offer to closing, plus they have offer in on another house with closing within a day or so. Worried about all of this for them and hope it works out but just wonder.

[BC1960]

I have no idea what you mean, or what the perceived issue is.

"Square footage from their buy to new appraisal is about 500 to 550 more." What does that mean?

"First the offer was 6500 less than asking price then they countered they'd pay the 6500 for full price." So the buyer has agreed to pay the full asking price?

"Now the appraiser for FHA just happens to be the same one they used for their appraisal..." The appraiser for the buyer also did the appraisal for the seller when they bought the house? Why would that be a problem?

"Now all of this is so so fast with about a month from offer to closing..." Closings occur much more quickly now than even just a few years ago. 4 to 6 weeks is pretty much the norm.

"...plus they have offer in on another house with closing within a day or so." Who is they? The buyer?

[Phil A. Delphia]

A FHA loan requires that sale price be at appraisal value or less for the loan to be approved. If the appraisal value comes in at more than the maximum amount of money approved for the borrower to take out a mortgage with, then the loan will not be approved unless the seller agrees to lower the price to appraisal value. So unless there's an excessive difference between the agreed sale price and loan amount, is there some other problem in your friends situation? And why aren't you asking in a more appropriate forum, like the finance section of CD?

[beer belly]

When we purchased our current home, we made a full price offer and never stepped foot in the house till Contracts were in motion. Seller wanted a "quick sale, how fast can we close ?".....I told him "we can close in 10 days".....he ended up taking a step back and we closed in 6 weeks.....as a matter of fact, we signed all papers prior to closing date, and went on vacation, came home and got the keys from the Realtor. As long as sale goes thru, and the check clears, why worry about how it happened ?.

[Pinehurstcharlie]

Originally Posted by BC1960

I have no idea what you mean, or what the perceived issue is.

"Square footage from their buy to new appraisal is about 500 to 550 more." What does that mean?

"First the offer was 6500 less than asking price then they countered they'd pay the 6500 for full price." So the buyer has agreed to pay the full asking price?

"Now the appraiser for FHA just happens to be the same one they used for their appraisal..." The appraiser for the buyer also did the appraisal for the seller when they bought the house? Why would that be a problem?

"Now all of this is so so fast with about a month from offer to closing..." Closings occur much more quickly now than even just a few years ago. 4 to 6 weeks is pretty much the norm.

"...plus they have offer in on another hot thith closing within a day or so." Who is they? The buyer?

No my friends have a FHA buyer. When they bought the house it listed as 1820 sf their new appraisal came in at 2320 with nothing added on since they purchased. The buyer offered 6500 less than the asking price then sellars countered back with they would pay the 6500 if he paid full asking price and he agreed. Buyer has never been in this house he is one state over. Now the next thing is the appraiser they used just happens to be the same one that FHA is using for appraisal and inspection. From start to finish it should be 30 days and then they have offer on new house to close within in a day . I just think the whole thing is a bit strange and worry that this might not make it to closing . Wanted thoughts on if anyone has run into buyers using FHA to buy their house .

[Pinehurstcharlie]

Originally Posted by beer belly

When we purchased our current home, we made a full price offer and never stepped foot in the house till Contracts were in motion. Seller wanted a "quick sale, how fast can we close ?".....I told him "we can close in 10 days".....he ended up taking a step back and we closed in 6 weeks.....as a matter of fact, we signed all papers prior to closing date, and went on vacation, came home and got the keys from the Realtor. As long as sale goes thru, and the check clears, why worry about how it happened ?.

I just hope it does but they didn't know it was FHA at the first offer and counter. Just heard horror stories about FHA and don't want to see that happen to them. Was the house local you bought or not? I know folks buy sight unseen

[BC1960]

FHA is merely a mortgage guarantee, not a lender. Obviously the buyers don't have a large down payment. I don't understand your suspicion of a buyer using an FHA-backed mortgage. And the FHA doesn't have appraisers, the lender does.

[Pinehurstcharlie]

Originally Posted by Phil A. Delphia

A FHA loan requires that sale price be at appraisal value or less for the loan to be approved. If the appraisal value comes in at more than the maximum amount of money approved for the borrower to take out a mortgage with, then the loan will not be approved unless the seller agrees to lower the price to appraisal value. So unless there's an excessive difference between the agreed sale price and loan amount, is there some other problem in your friends situation? And why aren't you asking in a more appropriate forum, like the finance section of CD?

Yes the Sq. Ft is off by about 500 or 550. So the price is higher than it should be for the size. Thanks I will go to that forum u

[Pinehurstcharlie]

Originally Posted by BC1960

FHA is merely a mortgage guarantee, not a lender. Obviously the buyers don't have a large down payment. I don't understand your suspicion of a buyer using an FHA-backed mortgage. And the FHA doesn't have appraisers, the lender does.

Just know many realtors don't like dealing with them, yes they are used for buyers with low down payment and credit scores. So lots can go wrong.

[Bill Hitchcock]

Disclaimer: I have been a licensed NC real estate broker since February, 2005.
The disparity in square footage is concerning. The real estate commission might forgive a 2%-3% miscalculation, but not a 30% error. It sounds to me that a room in the prior appraisal was not considered as part of the heated square footage that now is. There could be a couple of simple reasons as to why.
The concerns about an FHA backed loan come from their more stringent loan approval requirements. More "weight" is put on both the buyer and seller.
Don't be surprised if the process takes more than 30 days. In fact, I would expect it. Please have your broker stay on top of things, even if it is not traditionally their job. FHA and VA loans have strict guidelines ans its easy to drop the ball if not on top of things.
God Bless!