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If Financing Options are Not FHA Nor VA
A few of my Sacramento home sellers have elected not to advertise their homes as available for sale with FHA nor VA terms. In other words, they want a cash or conventional offer. Apparently, this either sounds like a foreign concept to some or they just don’t care and will submit an FHA offer anyway, hoping the seller will change her mind.
After watching a few sellers lately reject FHA offers in hopes of a conventional or cash offer, I thought that it might be better to be completely upfront about the fact that some sellers don’t want FHA or VA. There is no point in listing a home for sale in Sacramento with FHA or VA terms if the seller plans to reject those offers in favor of conventional or cash. Because odds are in the seller’s favor, especially in this Sacramento seller’s market, that she will receive a conventional or cash offer. It seems the fairest and most effective way to honestly advertise a home is to eliminate those types of financing options from MLS when the seller doesn’t want to accept those types of offers. We don’t want to mislead a Sacramento REALTOR.
I realize some agents believe that agents routinely fail to note FHA or VA as financing options in MLS when they really meant to do so. This means that agents think other agents make mistakes. Sometimes, they do. But the odds still exist that when FHA and VA is not noted, then it is not available for that property.
I’ve had buyer’s agents call and try to talk me into accepting an FHA offer. They are relentless. They will write emails, too, and go into great detail all about the strengths of their buyer’s FHA offer, explaining what their buyer is willing to do in the event there are funding conditions, and they won’t take no for an answer when the answer is no.
I feel like saying: Read my lips. No, the answer is no. No FHA and no VA and no exceptions. I realize the market is tough for buyers, and that’s why I believe it is more important now than ever to accurately advertise a home and to not mislead buyers into thinking they have a chance to buy that home if they do not. I am not obligated to explain my seller’s reasoning when the answer is no. It’s just no. Accept it.
If you need a Sacramento real estate agent, call Elizabeth Weintraub, Broker, #00697006, with JaCi Wallace at RE/MAX #00773532 at 916.233.6759.
The Upside When FHA Buyers Cancel the Escrow
FHA buyers who cancel escrow pave the way for the next FHA buyer.
It’s doubtful that most potential home buyers start out the home buying process by thinking they will become one of those freaked out FHA buyers who might cancel the escrow, but it can happen even in markets of tight inventory more often than you would imagine. There are many reasons, none particularly substantial from an experienced listing agent’s point of view. The reasons tend to range the gamut, from unsophisticated to twisted to incorrect analyzations, but whatever the reasons the decision is right for them. Buyer’s agents do their best to manage these events; however, they are not always successful.
You can’t change the mindset of stubbornness in some people. It’s a fine walk for buyer’s agents. On the one hand, they may instinctively realize the buyer is unreasonable but, if they agree, they lose the buyer. Sometimes they are afraid to point out: No, the seller will not rip off the two-year-old brown roof and replace it with your favorite color of black. In that instance, the buyer would probably feel alienated and jump ship. They often feel there is not enough real estate business to allow them the luxury of choosing their buyers, so they stick with whomever they get.
The thing is you can’t blame the buyer’s agents when FHA buyers cancel the escrow. Their agents are doing the best they can. You also really can’t blame the buyers, especially when they are first-time home buyers. It probably hasn’t sunk in that all homes have defects, nor that they might not buy a home now, especially if they try to force the seller to meet demands the next buyer won’t make. Or, that it could take them another year to find a home. We have such reduced inventory in the Sacramento area, so little for sale, and almost every cute home will receive more than one offer for it. With every rejected contract, though, they learn more about the market in Sacramento and what it will take to buy a home.
Meanwhile, back at the ranch, the sellers might be wary that the next buyer will cancel the escrow. But that is unlikely. The odds are most buyers who go into escrow manage to close escrow. Sometimes, sellers want to take an offer from a conventional buyer over that from an FHA buyer — OK, most of the time, they do. But in a situation where it was an FHA buyer who elected to cancel the escrow, the seller is actually in luck. Because FHA appraisals are assigned a case number, and when the home immediately resells to another FHA buyer, that same case number will be pulled.
I sold a home in Natomas last year this way. We did not want a conventional offer but accepted FHA for that reason. Agents could not understand, what? No conventional offers?
An FHA buyer who cancels escrow means there are no appraisal concerns for the next FHA buyer. The seller simply lost a couple of weeks of marketing time, but there are dozens of excited buyers right around the corner who would love to buy that home this spring. All the reports have been completed, too, so the seller is able to supply full disclosure prior to an offer. When an FHA buyer cancels the escrow, it’s a slight setback but odds are the next buyer will be stronger, better informed and more deserving in the seller’s eyes, especially when there are no concerns of a low appraisal.
Better yet, the market has gone up. If you’re thinking about selling a home in the Sacramento area, call Elizabeth Weintraub, 916.233.6759. Put 40 years of experience to work for you.
