When issuing a mortgage, the Federal Housing Administration completes a thorough inspection to ensure the home is in good shape. If they find any issues, the potential borrow could find themselves without a loan, according to MarketWatch.
Brian Coester, chief executive of Coester VMS, told the news source that the FHA wants to help protect the buyer, but it will simply not back a mortgage on a home that will require a lot of repairs. This could potentially hurt first-time home buyers who don't have the available funds to cover any surprise repairs after closing on a home.
Some potential problems home buyers should look for before closing on a home include chipping paints, home systems not working, trouble with the roof and the lack of a safe and secure interior.
Coester added that sellers should address these issues before holding an open house in order to make closing on the home a much smoother process for home buyers.
If the problems aren't addressed, sellers may struggle to find first-time home buyers, as 54 percent of these buyers between July 2010 and June 2011 used a low-down payment FHA mortgage, the news source reported, based on data from the National Association of Realtors.