So, you received your pre-approval for an FHA loan and you are ready to go see all the good deals that you have seen in the Albuquerque MLS. Some of the deals look amazing! You think to yourself "I can do some work on the home. I'm good with a fixer-upper!"
Hold that thought...
If you have been qualified for an FHA loan there will be several things that the home itself must qualify for if your lender is going to invest in you and that home. These items can range from a non-functional furnace to missing tiles or shingles on the roof to significant cracks in the walls or slab. In other words, the home must be "turn key" in order for it to pass the FHA test which will be done by a certified FHA appraiser.
So, I would be willing to bet that a majority of those great deals are Albuquerque short sales or bank owned properties. These homes are all sold as is. The seller will not pay for inspections OR repairs. You may get lucky on a foreclosed home (not HUD) and get the bank to pay for the FHA required repairs, but don't count on it.
My point is this; be careful about buying these types of properties and be SURE that your Realtor is experience in these types of deals. They can be very risky and, before you know it, you could have thrown $1,200 at a home that will not qualify for the loan itself. The inspections should be staggered and done one at a time based off what you and your Realtor discuss. Paying for the home inspections one at time rather than all in one day could save the Albuquerque home buyer money.
by Tim Fish