It’s best to be aware ahead of time of those “red flags” which might be stumbling blocks for getting financing.  It is not unusual in today’s market to see a home for sale needing repairs or being sold “as is”.  It generally occurs with foreclosures, estate sales, or with sellers who do not have funds for repairs.   While it may be a great opportunity for buyers to create some sweat equity, there are “red flags” to look for.  FHA and Rural Development (RD) loans have become very popular with first time home buyers.  However, they have strict guidelines on the condition of the property and will not lend on it until it meets their guidelines.   Here are some of the problem areas for FHA & RD loans that I’ve seen:

• If there is clear evidence of mold, an appraiser will make the appraisal subject to satisfactory mitigation – regardless of the type of loan.
• The well must be located 100’ away from the leach field.  Unless the well has a state exception, it may require relocating the well or the leach field.
• Any safety items such as broken panes or missing stair railings must be fixed.
• Structural issues like leaky roofs, flaking paint (in or out), etc. must be addressed.
• Specific water tests are required depending on the loan.  Dug wells are notorious for testing positive for coliform.

Knowing the “red flags” and preparing strategies to address them will bring buyers and sellers closer to a successful sale.  Call me if you are looking for an agent to help strategize for your success!

Donna Forest, ABR