What is involved in selling to someone who wants a FHA loan?

Question by Michelle: What is involved in selling to someone who wants a FHA loan?
I had my condo on the market and it has an offer now. They are wanting a FHA loan and have added in the extra 3% over and beyond my asking price. My realtor is telling me that I can deduct this portion off of my taxes since I’m paying for it now in the cost of selling my place. This is only the 2nd time I have sold a place and the other was a conventional loan and that’s all I’ve ever done too. I will see the offer tomorrow, malady generic so would appreciate any advice. Thanks!

Best answer:

Answer by malinmo
The buyers are asking you to pay for closing costs up to 3 percent of the purchase price. You don’t have to agree to this. But in today’s real estate market, a seller has to make concessions if he/she want to sell. What is often written into a contract that is being bought with an FHA mortgage is the amount of money the seller is willing to spend to make repairs to the property that are mandatory for issuance of an FHA mortgage. This cost in my market is usually written for up to $ 300.

Your realtor is right about deducting this 3 percent as an expense to sale. But ask your realtor if adding this 3 percent to the purchase price is customary in your market. I suppose it all boils down to how desperate you are to selling. Also, be careful the added 3 percent does not price your condo above the appraisal price or else the buyers’ won’t be able to get an FHA loan unless they are willing to pay the extra above the appraisal.

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