Seller Pre-approval: FHA loans can help homes sell faster.

In the first few posts during FHA Week, we've talked about the major changes to the program and busted the myth about condo financing on FHA loans.

Today, we'll talk about a successful strategy used by agents who are earning higher sales prices and shorter market times for their clients:

Pre-Approving the Home Sale

Most homebuyers understand the importance of obtaining a pre-approval to aid in negotiations. Savvy buyers obtain pre-approvals or even conditional commitments prior to making their offer to help prevent a counteroffer.

In very much the same way, savvy sellers can use FHA financing to increase the number of potential buyers and thus reduce the need for the dreaded price reduction.

Down Payment Requirements If appropriately structured, many homebuyers can find that they will be eligible for 100% financing through neighborhood assistance programs. Many of today's pre-approved homebuyers need 100% or near 100% financing.

Minimum Credit Score Requirements: FHA loans still allow for people with damaged credit when the risk factors still favor lending to them now. Many of today's homebuyers are only pre-approved for an FHA purchase.

Seller Contributions: More effective than a price reduction, a seller contribution to closing costs will make your home more affordable to a buyer. A seller may credit costs which can allow buyers with less cash to close and a seller may also contibute to rate discounts that allow someone to buy a slightly more expensive home (yours!) at the same payment.

How to Pre-Approve Your Home for FHA Financing

Step 1: Contact us. With a little information about your home, we can issue a decision that indicates whether it may qualify for FHA financing for prospective buyers.

Step 2: Have your Realtor market this information. Many Realtors with FHA-approved buyers are now searching for that "FHA" tag in the MLS. Updating the comments to reference closing cost credits can help. Are you selling by owner? Contact us for a quick cheat sheet on tips we've seen Realtors use with success.