THE $7K FHA TRAP

Seller Advice — Dave’s recent short-appraisal story: an FHA buyer needed closing costs, the appraisal came in $7K short of the asking price, and the deal collapsed. Cautionary tale for sellers using FHA financing.

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Full Transcript

it’s all part of the marketing and the advertising and the whole bit It’s a whole package that comes together and we’re all using the same thing since we’ve all learned from the same points Like I said it’s just interesting that I haven’t had that I haven’t had a short appraisal probably in a year Then all of a sudden here in the last couple of weeks I’ve had two and it caused one of my deals to fall out because it was way short Now it was an interesting situation because this buyer was an FHA buyer who needed closing costs and so we raised the price some to accommodate for the closing costs but the appraisal came in for 7 000 less than our asking price Then when you on top of that we were way off and the buyer didn’t have any money It’s an FHA deal Now we’re stuck with the appraisal for the next 90 days but odds are that it’ll be a conventional or a VA loan or the seller would be okay with the FHA appraised price but he just can’t throw in another 7 000 8 000 of closing costs Like I say it’s just interesting that this time.