Some sellers just do not want all the hassle of that process, and wait for a conventional loan buyer or cash buyer.
The bottom line is that loan terms are part of the offer. A better loan, is a better offer, since if all the other contingencies are equal, a better loan has the best chance of closing. That is the name of the game - closing.
February 28th FHA ceased allowing "spot approvals" for condos and townhomes. That means that if a building is not approved, the ONLY way one can buy a unit is with conventional financing. To obtain an approval for an entire building will cost around $5000- $8000 in our area, so many smaller buildings HOAs are not going to approve an expenditure of that amount just so one owner can sell.
There is a sentiment by some that unless the buyer has 20% down, they are not "real buyers". The truth is that once you have approval from a lender (and I would ask your listing agent to call the buyer's lender and actually TALK with them about their qualifications), the amount being financed is not as important as the motivation and qualifications of the buyer.
Other than that..some agents seem to think you need 14 or more days to get an FHA appraisal however, that definitely is lender specific. Personally I do not like to tie up my sellers for that long.
Anyway, your agent should be able to handle that and make sure the financing contingency is not that long. Best of luck to you!
Erik J. Weisskopf, ABR,CDPE,CRS,GRI
In December 2009, FHA issued new guidelines for condo buyers.
As of December 2009, a condo buyers can receive FHA mortgage as long as the condos they plan to purchase is in a condo development where at least 30% of the units are already sold AND no more than 50% of units are financed with FHA loan.
[Prior to that 50% of units had to be sold and only up to 30% of condo owners could have FHA financing ]
As for FHA appraisal, FHA requires that home is in moving-in condition and there are no major problems with the house: mold, cracked foundation, roof damage, working appliances, etc. If your house is in good condition, you have nothing to worry about.
What I've found recently is that often you see no FHA loans for condos, that are not FHA approved. I had 3 contracts that close in May on 3 separate condos, and they are all FHA loans. I've not yet experienced any difficulty in losing FHA loans, but I understand the challenges presented with an FHA loan on a property that is in need of major repairs (e.g., mold, flooding, missing appliances, etc.) I hope this is helpful.
By the way, they have been easing up a bit from where they used to be - just an FYI.
I had a client who sold in February. There was some peeling paint around the trim of the garage door. They insisted that we paint it even after I explained that it was 10 degrees out and that if my seller paints it now, the buyers will have a worse mess in the spring. Latex paint does not dry in 10% and it becomes like rubber.
Well........ a few months later I got the call. The paint is not only peeling but they can't sand it down because it turned into a rubbery-like substance. Go figure.
But, not to scare you because I have had many FHA closings in the past couple of months and they really have become more lenient.
Hope that helps.