Issues to Consider When Selling Your Home to an FHA Borrower

If you are selling a home, you may need to negotiate with buyers funding their purchases with an FHA mortgage. What do you, as a seller, need to know about the nuances of FHA mortgages? Among your early concerns, you should get familiar with FHA appraisal requirements. The FHA appraisal is similar to a home inspection, but it is a tool for the lender, not the borrower.

Appraisal Issues

The appraiser looks for problems. Cracks in the foundation, roof issues, and problems with the home's mechanical systems are all appraisal red flags. And those aren't the only ones.

Safety issues are a big deal. Loose stairs, bad wiring. Fix them. Mold or peeling paint? Deal with it. All systems must work: plumbing, electric, heating. A clean, well-kept home sells better.

Before the appraisal, get your house ready. Fix any peeling paint—especially in older homes, it might be lead-based. Repair any cracks or structural damage. Check all your systems. Make sure they work. Fix anything unsafe. Deal with mold or moisture. Have paperwork for your systems. It speeds things up.

The appraiser might ask for repairs. You'll need to negotiate. Who pays? When? Get it in writing, as you won't be able to enforce a "gentlemen's agreement" or other verbal arrangements. The sales contract must clearly state who pays in which circumstances.

Online Real Estate Listing

Your online listing matters. Most buyers start online. Use clear, bright photos. Show off your home's best features. Write good descriptions. Use keywords like "FHA approved" or "FHA loan."
Google likes mobile-friendly sites.

Keep paragraphs short, use clear headings, and be honest in your listing. Understanding local rules is important, as real estate laws change over time.

FHA loans have specific rules, and you should be prepared for extra paperwork. You might need to provide more documents about your home or supply information about possible lead paint issues or other factors. The buyer's lender will ask for these. Have them ready.

Other Issues

Be prepared for the participating FHA lender to be thorough. They will verify everything, which can take time. Don't take it personally; it's part of the FHA process.

If repairs are needed, get multiple quotes and try to get the best work you can. Don't just pick the cheapest. Ensure the work is done correctly, as the appraiser must check again.

Be ready to negotiate. FHA buyers may request seller concessions, typically 6% on FHA transactions. This is a common feature of FHA loans, and it's good to know in advance that you may be asked for it.

Keep your home clean and tidy. It makes a good impression. Small things matter. Fresh paint, clean carpets, and well-maintained yards can make a big difference. Don't ignore small problems. They can become big problems later, and correcting them is always best before the FHA fee appraiser visits.

Be patient. FHA loans take time. Don't get discouraged if things move slowly. It will be worth it in the end. Finally, trust your real estate agent. They can guide you through the FHA process and help you avoid costly mistakes.