Why do agents put only conventional financing on MLS, when FHA financing is available?

Asked by Natalie Smith, Fort Lauderdale, FL Sat Jun 15, 2013

I understand that condo's you need to make sure its on FHA approved condo's list. But why are single family residence being listed as conventional only, when the property has nothing wrong with it and the value is there....

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21
Barbara East…, Agent, Pompano Beach, FL
Sat Jun 15, 2013
There are so many errors and mistakes on our MLS listings and it is often because of inexperienced, uneducated or sometimes lazy real estate agents. Some agents will just check cash and conventional when entering a listing because they think that those two will cover everything. I don't pay attention to the Sales Terms. If my Buyer is interested than I make an offer.
2 votes
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Flag Thu Jun 23, 2016
Michael Cubs…, , Houston, TX
Sun Jun 16, 2013
Many reasons, every thing from the agent being sharp enough to notice FHA required repairs and determining the seller will not make them, to an agent just being to lazy to even ask their client. There's also the matter of truth in advertising, when entering FHA and/or VA into MLS, we agents are advertising on behalf of our client, that our client WILL cooperate with FHA lenders requirement's. Many sellers ,when told they will be required to make repairs PRIOR to closing,decline.
1 vote
Yanoska Diaz, Agent, Miami, FL
Sat Jun 15, 2013
Conventional underwriting guidelines are completely different than FHA. I will give you a recent example where I was the Listing Agent:

Perfect couple, employment, assets, credit, the Selling Agent presented such beautiful scenario they convinced me to take their offer. Inspections and Appraisal? What we thought if was perfect turned out not to be perfect at all, a light fixture here, a wire there....everything needed fixed prior to closing. The Loan commitment? A million and one conditions, one of which the borrowers were unable to produce, 12 months cancelled rent checks, SURPRISE! 45 days pending for a dead deal.
1 vote
Christopher…, Agent, Camp Hill, PA
Sat Jun 15, 2013
Hi Natalie,
I am not sure why an agent would do this unless the owner does not want to deal with an FHA buyer and appraisal usually it would be because in my experience an FHA buyer almost always asks for sellers help. Hope this helps and best of luck to you.
1 vote
Robert DiAlb…, Agent, Coral Springs, FL
Sat Jun 15, 2013
Sometimes the cost to the seller might be higher with an FHA or VA loan. A good agent will try to find the best way to navigate the process.
1 vote
Victor Patane, Agent, Ft Lauderdale, FL
Sat Jun 15, 2013
Victor Patane, Broker in Ft. Lauderdale. You need to find an agent that is knowledgeable about FHA financing and even if the single family homes or townhouses are listed without offering FHA financing, the agent can still present the offer and most of the time the seller will accept the offer especially if it’s a good offer and the buyer is not asking the seller to pay part of the closing costs.
It makes no difference to the seller, they will still get their money at closing!
It’s all about knowledge and presentation!
victor@1stamericangroup.com
1 vote
I'm confused. Literally. FHA VA isn't this discrimination to the buyer. What's next sex origin gender. Or wait same sex couples. My husband and I have a 699 credit can do FHA or conventional. MLS listed all above here and rural. Made offer 2 thousand less than asking price. As we submitted our realtor said. Oh yeah his realtor said he's not accepting any FHA offers. Didn't he sign a contract when he listed his house in Michigan like I did picking what you'll accept from a buyer to get financed ?? Confused. Less money down I'm only asking for inspections. I'm paying my own closing cost. I've never sued. But you wonder why. White proud owned 9 houses. Sold my last $375,000!! Buying a home for justbthe summer that will be primary residence so I can travel in the winter for $139,000 guy won't deal FHA but advertises he will. Hmmmm DISCRIMINATION
Flag Wed Jan 11, 2017
FtLauderdale…, Agent, ft lauderdale, FL
Sat Jun 15, 2013
Everyone has said it like it is. However you still can't help but feel for the average American who still simply 'wants to buy a home'. It will take a lot of negotiating on the realtors part for his/her buyer. FHA buyers are literally crying down the phone that they just can't find a house! Sellers control the market right now and they can dictate the terms.
1 vote
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Flag Fri Jun 24, 2016
Claudio & Ro…, Agent, Coral Springs, FL
Sat Jun 15, 2013
Natalie,
There are several possible answers to your question.
Its kind of like the game kids play Rock, Paper, Scissors. Except in Real Estate its Cash, Conventional, FHA/VA.

It all has to do with the strength of the loan, the least amount of contingencies, and the strongest possibility of the deal actually closing on time.

In this strong sellers market, sellers are pricing a bit above appraised value, this often requires a buyer to bring extra money to the table, more likely then not an FHA buyer may not have this.

Using a realtor that's a great negotiator and that's really working for you as my husband/partner Claudio and I do....We are able to help many of our FHA buyers purchase a home they love!

Give us a call anytime
Robyn and Claudio Petasne 954-770-6850
http://www.FtLauderaleRealEstateForSale.com
1 vote
Stephen McRo…, Mortgage Broker Or Lender, Tampa, FL
Sat Jun 15, 2013
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To add to Annette's comments below, buyers can choose to work with anyone one of thousands of very Professional and More Experienced Agents and Real Estate Brokers who will offer to reduce their Commission Points to convince the seller to accept an FHA buyer.

"Realtor Rebates" or "Buyer's Agent Credit" can be use to benefit the consumer in a lot of different ways!

To view just a few of these ways, see an example GFB here:

http://www.trulia.com/blog/steve_31/2012/09/gfb_1_000_000_purchase

http://www.trulia.com/blog/steve_31/2012/08/working_with_a_b…

Note: Consumers should shop real estate agents and lenders for their best overall deal.

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1 vote
Stephen McRo…, Mortgage Broker Or Lender, Tampa, FL
Sun Jun 16, 2013
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Mortgage Broker Responding...

If I were a seller, I too would list only accepting conventional. We all know there is an avalanche of buyers, so why not only deal with the cream of the crop buyers?

I personally look forward to the day FHA is once again "DE-THROWNED" and marginalized with the re-emergence of:

100% No PMI

80/20 (100%) No PMI

NO DOC, 80/20 (100%) hybrid-Option Arms with a 1.00% minimum start rate ........JUST JOKING ON THIS ONE! LOL

However, if used the right way, by a borrower who is not a complete financial numbskull, this program was be a very effective financing tool in an appreciating market.

http://WWW.PRO-OPTION.COM

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0 votes
So, if you are selling a property for 200k and Buyer A is approved by FHA offering 200k and Buyer B is approved for Conventional offering 180k, you're going to (a) leave 20k on the table or (b) keep paying T&I while you wait on your "perfect buyer"? Wow...
Flag Tue Oct 25, 2016
Your comment is so bias.
Flag Fri Aug 26, 2016
Robert DiAlb…, Agent, Coral Springs, FL
Sun Jun 16, 2013
Very encouraging to see so many agents commenting and helping other agents and buyers and sellers. Just keep doing what you are doing.
0 votes
Robert DiAlb…, Agent, Coral Springs, FL
Sun Jun 16, 2013
FHA and VA could have more conditions and requirements which may impact the Seller. Every transaction lives on its own and the parties have to make their own decision as to the costs to each party and the terms.
0 votes
April Crowder, Agent, Charlotte, NC
Sat Jun 15, 2013
You do things differently there in Florida. Most agents in the Charlotte area list all three types of financing on every listing. Some agents list all three even on condos and a lot of condos have problems with FHA financing.
0 votes
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Flag Fri Jun 24, 2016
Greg Young, Agent, Weston, FL
Sat Jun 15, 2013
Barbara Easton-Irvin is the only one brave enough to call it like it is. As you are an agent I need not say anymore.
0 votes
George Raymo…, Mortgage Broker Or Lender, Fort Worth, TX
Sat Jun 15, 2013
That's easy! Over the years FHA, VA or USDA loans have been given a bad rep. This is mainly due to the Agent's previous experience with these types of loans and I have to tell you this, in some cases I don't blame them. In my industry, we have all kinds of rookies out there passing themselves off as experienced Loan Officers.

These LOs are out there issuing pre-approval to borrowers who couldn't finance bubble gum. So the Agents just don't want to mess with these types of offers anymore. It's my job as a LO, to push the best program available for my client, and with the recent changes to FHA's MIP and MMI fees, it's actually better to try to roll these one time cookie cutter FHA borrowers into a 97% or 95% Conventional because there are more options regarding loan terms and especially PMI.

We lenders can do a LPMI (lender paid mortgage insurance) completely eliminating the PMI completely and the payment is much more attractive. Another issue is, Appraisals. Many Agents understand that FHA and VA appraisals do come with baggage. A Conventional loan will allow less than perfect properties while usually FHA and VA won't and even if the appraiser gave the property a pass, sometimes the underwriters will require repairs made that the appraiser didn't call out. Therefore the Agents have less to worry about with Conv offers. Hopes this helps.

Best of Luck!
Web Reference:  http://www.AFN-Loans.com
0 votes
Dennis Evans, Agent, Clifton Park, NY
Sat Jun 15, 2013
The Petasne Group has nailed it.
However, other options exist... such as VA loans and other options such as the owner holding the paper, etc.... But it is a matter for you and your banker and or Realtor to talk about to present the strongest offer available to secure the property.
0 votes
Bill Eckler, Agent, Venice, FL
Sat Jun 15, 2013
Natalie,

This is a good question.....in my opinion, the fact of the matter is that most sellers would accept other forms of financing but "conventional" is their preferred choice. This is because of the additional inspection criteria, and seller financial contributions that can become a part of these types of transactions. Conventional terms are very straight forward and minimize these surprises.

Hope this is helpful.

Bill
0 votes
John Bourassa, , Fort Lauderdale, FL
Sat Jun 15, 2013
Natalie,

You are a real estate agent. Your should know the answer that question (your own question).

Upon getting a listing, I explain to my sellers what are their options concerning potential offers that will come in (cash, conventional and FHA, VA or other terms). Because we are now, undoubtedly, in a "seller's market" sellers don't want extra headache and hassles (no more than we, agents, do).

However, there are market areas where properties can't sell without FHA loans because buyers in those market areas can barely muster up the 3.5% required down payment, usually those buyers credit scores are low and they also beg sellers to contribute towards closing costs. It isn't the case in the affluent neighborhoods anywhere in the US

If the real estate market ever turns back to a "buyer's market", then, sellers (affluent neighborhoods or not) will gladly accept or consider any kind of financing.

Who said life is fair?
0 votes
Annette Law…, Agent, Palm Harbor, FL
Sat Jun 15, 2013
This is the right time to have a meet up with your real estate professional. If your agent is a multi0dimensional agent who know more than one way to buy and sell real estate, you want to ask 'Why do home seller view FHA and VA backed mortgages as less competive than conventional?"
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You will come to realize, in vivid FULL COLOR, that price on only one aspect of a purchase offer.
Sellers do place a premium on the 'ASSURANCE of CLOSING."
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A multi-dimensinal (full service, no rebate, no discount) treal estate professional will be able to advise you HOW to present an FHA or VA backed offer to nullifiy the risks involved to the homeonwer. If you do this YOU CAN make a purchase offer on homes listed as 'conventional only" (assuming the home will qualify) AND you have selected the RIGHT lender.
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Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEZ.us
0 votes
Phil Rotondo, Agent, Melbourne, FL
Sat Jun 15, 2013
........or it's just a case of the la not entering the FHA-VA option on qualifying listings.
Relax and just call the la to clarify.
0 votes
Stephen McRo…, Mortgage Broker Or Lender, Tampa, FL
Sat Jun 15, 2013
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Because in this Seller's Market, sellers and listing agents don't want to get tied up with an FHA deal and all the issues that borrowers often have who have to go FHA

They are searching for the 20% down, better credit borrowers, borrowers that still have the ability to make the sale happen if there is an appraisal issue, etc.

FHA is usually sought after by borrowers whose credit is not the best, 1st time buyers and borrowers with limited funds.

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0 votes
oh stephen thanks for being honest,
Flag Mon Oct 3, 2016
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