If you’re selling a home, you need to be aware of FHA’s (Federal Housing Administration) minimum property standards (which reflects most mortgage requirements) because someone purchasing your home using conventional means will need to apply for a loan, and the condition of your house will be a factor that will determine whether or not they’re able to qualify.
If no one can qualify for a FHA loan to buy your house, you may not be able to sell it conventionally, so it’s important to be clear on what condition your house should be in prior to listing.
Here’s what sellers need to know about FHA’s minimum property standards:
Safety vs. Cosmetic
The FHA isn’t concerned about minor defects and normal wear such as leaky faucets, worn-out counter tops, or worn carpeting. While these things are unsightly, the FHA is ultimately concerned about health, safety, and structural soundness. So you need to look at anything that might compromise those things.
Here are some examples of things that will need to be repaired right away in order to meet the FHA’s minimum property standards:
- Frayed or exposed wires on electrical boxes.
- Large cracks in the slab that could affect structural soundness.
- Missing roof tiles.
- Leaky roof.
- A roof with more than three layers of roofing.
- Chipped or peeling paint on the inside or outside of home.
- Contaminated soil.
- Non-functioning toilets.
- The absence of showers or sinks.
- Significant dampness or water damage.
- Absence of proper flooring.
- Windows that do not function.
- Asbestos that is damaged or deteriorating.
- Termite damage.
- Defective construction.
Here’s more information on the requirements: https://archives.hud.gov/offices/hsg/sfh/ref/fhaintro.cfm
If you there’s anything on your property that might not meet the requirements, you’ll want to get bids from several trustworthy contractors. You don’t want to cut corners on the work because if the appraiser catches something shoddy, the work will have to be done over again, which will cost you more money.
If you can’t afford the repairs, or just don’t want to spend a bunch of time managing the work, the other option is selling your property to a cash buyer. They’ll purchase it for cash as-is and close in as quick as seven days. They can also typically offer close to what you would net if you were to sell your home using an agent.
If you’d like more information about how selling a property to cash buyer works, you can click here or fill out the contact form below.