VA was the worst for sellers, requiring every little detail to attended to by the seller prior to closing, but they have trimmed their required repairs down compared to years ago.
FHA is actually pretty loose, unless the repair indicated is structural or renders the home otherwise uninhabitable.
Lenders offer FHA type 203(k) loans, both in full-blown packages for up to $35,000 in repairs, and streamlined 203(k) loans for smaller repair estimates above $5,000 but below $15,000. Generally, small repairs under $5,000 can be handled by the buyer using 203(b), but consult your lender.
Conventional loans are also available such as HomePath Renovation, which sets aside an escrow account for repairs, just like 203(k). Ask your lender. As a seller, you may not have a loan officer at the moment, but your Realtor can probably refer you to several. Those that can handle renovation loans can explain the various programs and what your buyer needs to do.
Many sellers opt to contracting for repairs to be paid at closing. If the contractor is willing to do the repairs and wait until the funding at closing, this solution will work without having any lender involvement. However, the contractor will want a definitive approval before beginning work so as to assure the closing will occur. If it doesn't close, you'll be on the hook.
Now an FHA appraisal may require certain things to work and certain condition.
That could be an issue.
Check with your realtor....to see what works for your situation. Maybe 203k might work for some buyers.
You might also be able to get the work done with liens for the work paid at closing. You'd have to check with contractors to do that or see if they are willing to do that.
RE/MAX Realty Affiliates
1320 Hwy 395
Gardnerville, NV 89410
OR address all the issues for repairs where a typical home buyer can purchase the house.
Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
The inspection really doesnâ€™t have an effect on the loan. All the inspection does, is tell the prospective buyer the condition of the house and if there are any major issues that need to be addressed before they buy. The bank would be concerned about the appraisal. That is what tells them the property is worth the loan value. A house in perfect condition that is over priced wonâ€™t appraise. What you owe, would like to get or have invested in the property doesnâ€™t matter. It has to appraise for the loan value.
If you arenâ€™t already working with a Realtor, I live and work on the Westside of Fort Worth if you would like to meet and discuss your problem give me a call.
If you really need and want to sell the property why not sell it for cash to an investor?
Keller Williams Realty
Alexander Chandler Realty
There are "rehab loans" the most popular and common are the FHA 203K streamline with up to $35,000 available for upgrades and repairs and the non streamline for larger amounts. Both loans are more complicated and require a lender who is familiar with the products.
It may not hurt your marketing efforts to have your agent meet with a local lender who does these and to prepared some paperwork familiarizing buyers with the option.
Unfortunately homes that need work are on the bottom of most buyers lists. "Turnkey" or move in ready homes have move quickest as buyers are usually only willing to do the work, IF they are getting a great price. It make take a loss on your side to get someone willing to buy and take on the project, but this is a good conversation to have with your agent who knows your competition best.
The Lenders are getting more creative trying to help Buyers as well as Sellers:
FHA has a 203K loan which will piggy back the money for repairs and delay the payment for up to 6 months while the repairs are being made.
Fannie Mae has Homepath Renovation which will piggy-back up to $35,000 for repairs.
I suggest that YOU talk to some Lenders and have the information in place in advance. Your LISTING AGENT should help you on this.
Good luck and may God bless