MED

Thanks, Shane. I wasn't clear before. The $599 processing fee is not included in the $9380, so total could be as high as $9979. After rereading the contract, they are only wanting the 3% as part of the Nehemiah program for down payment assistance. The $5000 towards Buyer's closing cost is part of the standard Tx contract, paragraph 12 (Settlement and Other Expenses). Obviously, this is something that is highly negotiable. From what I can estimate, the TOTAL amount due at closing for the Buyer - minus the 3% down payment, will not likely exceed $5000. This assumes I pay 100% of buyer's closing costs & prepaid/reserves. By my calculations, the TOTAL out of pocket expenses for the buyer will be between $0-$100. This is certainly an interesting program. Move into a house w/ 100% financing and (almost) no money out of pocket.

I rec'd an offer on my house for $146,000. They want me to pay 3% DPA (Nehemiah) PLUS (up to) $5000 towards buyer's closing costs. This totals $9,380 (4380+5000). I know they are going for a FHA 203b loan. I'm ok with this offer (my net take home $ is above my minimum I was wanting), I just want to make sure I understand everything. From the spreadsheet I use to do my own GFEs, it looks like the buyer won't have to pay more than $100 out of pocket at closing. A few questions: 1. I'm a little confused about the maximum I'm allowed to pay as the Seller. From looking over the Nehemiah information, it looks like I can pay up t 6%. But, it is unclear (to me) if the 6% cap applies towards down payment only or down payment and buyer's closing costs. If the 6% cap applies to both DP & closing costs, then their offer is asking me to pay more than allowed by $620. 2. Since they are going FHA, aren't there limits to what I, as the Seller, can pay towards the Buyer's costs? I think the Nehemiah program allows us to bypass the down payment, but what about the other loan/closing costs such as loan origination, loan discounts, appraisal fee, underwriting fee, closing/settlement fee, title insurance, tax cert, recording fees, etc. If I'm not allowed to pay for some of these things, then I believe I won't have to pay out the full $5,000 (better for me). 3. Anyone know how much the Nehemiah Processing Fee is? The Buyer's agent has given 3 different numbers ($459, $499, $599). I sent an email to the Nehemiah people, but don't know if they will respond tomorrow or not. Any other issues from a Seller's POV I should be concerned with? Thanks.

Followup: I was ready to give up the $100 without a fight, but I didn't have to. The buyer didn't even ask for it when we terminated the contract.

For "discussions" sake, I also want to point out that it is called an "Option Fee". I don't see how "fee" is the same as escrow. Granted, I agreed to let the Option Fee apply towards escrow after the 10 day option period, but I didn't have to and the option fee shouldn't convert to "escrow" until after the 10 days. Just like the buyer had to pay the appraisal "fee", the buyer should pay the Option "fee". The buyer won't get their money back on the Appraisal.

Yeah, it's only $100. I was considering it "liquidated damages" and was going to apply to my mortgage payment. Now that this deal has fallen through, it has delayed finding other potential buyers. Oh well.

As discussed in my appraisal thread, my current deal will likely "officially" fall through today. The "standard" contracts prepared by TREC has a "Termination Option" clause/paragraph. My buyer used this option and paid me $100 as the option fee. This option fee allows the buyer to back out for any reason within the specified period (10 days) without loosing their earnest money. Now, the FHA section of the 3rd Party Finance Addendum says, "It is expressly agreed that, notwithstanding any other provision of this contract, the purchaser (Buyer) shall not be obligated to complete the purchase of the Property described herein or to incur any penalty by forfeiture of earnest money deposits or otherwise unless the purchaser (Buyer) has been given in accordance with HUD/FHA or VA requirements a written statement issued by the Federal Housing Commissioner, Department of Veterans Affairs, or a Direct Endorsement Lender setting forth the appraised value of the Property of not less than $ . The purchaser (Buyer) shall have the privilege and option of proceeding with consummation of the contract without regard to the amount of the appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage the Department of Housing and Urban Development will insure. HUD does not warrant the value or the condition of the Property. The purchaser (Buyer) should satisfy himself/herself that the price and the condition of the Property are acceptable." [Emphasis added by me.] As I read the above, I understand it to mean the buyer will get their earnest money back, regardless of time, if the appraisal is to low (which it was). My question is, am I obligated to return the Option Fee? I don't think so. I interpret the above to protect the earnest money only. Even if the appraisal comes in low (as it did), the buyer can proceed with the purchase if they choose. Since the decision is ultimately up to the buyer, I believe the "Termination Option" is still in play. If the buyer chooses to cancel, I keep the Option fee. If they choose to proceed, the Option fee is applied towards their closing costs.

As I said it is a popular neighborhood because it is small and secluded. Lots are 1/3 to 1/2 acre. Most homes sell within 30 days. My contract was 48 hours after listing and many phone calls still. Homes in my area are still appreciating, though not as much. I haven't seen appraisal yet and they may not let me see it. Because my area is small, there aren't a whole lot of comps to go by.

Contract purchase price is $146. Appraisal says it's worth $135. County appraisal is at $133 (for last year). I'm in an area where values are still appreciating (TX). The buyer is going FHA. I have not seen the appraisal so I don't know what they used as comps. Both my realtor and I believe the appraisal is BS. I'm sure this deal will fall through. I'm not worried because I had the first contract within 48 hours of listing and numerous people who still want to see it. I live in a popular neighborhood. But... what about the next deal. I wonder what the odds of the next appraisal coming in at a low value???

Well, the standard contract included the standard 3rd party financing addendum with the FHA box checked. There was an additional addendum that came from the mortgage company with the exact same language that was on the 3rd party financing addendum. I signed all. [edit] Signed contract within 2 days of listing.

Without actually reading it (waiting on realtor to deliver), I would agree with you DLG. I just thought it curious since the "standard" contract already has that provision (I think). Anyway, I'll guess I have to actually read the two and compare. No, we didn't "jack" the price up to cover costs. The deal we have is that I'm paying about 3% of the sales price towards buyer's closing & prepaids. But, the purchase price is still on par with the market value (according to my realtor).

I'm selling my house and my first offer is from someone who will be getting an FHA loan. With the standard TREC contract (Texas standardized form), they added an addendum from the bank basically letting the buyer out of the contract if the appraisal is less than the purchase price. I haven't actually read the addendum yet because my realtor is on her way over here now, but I just wanted to check to see if this is fairly standard. I'm pretty sure the standard contract already has a similar clause in it. My realtor is green and her office manager suggested we don't sign the addendum.

I haven't locked yet either. I'm a little concerned myself about what the rates are going to do.

Yes! quite expensive. Thanks to the rock, about $8500 for combination 6' wood privacy fence (sides) and wrought iron (front). And 1 side is already in place!

I don't know, that's pretty darn nice. Big yard too. 5.5% WOW I'm still floating right now. I hope the rates drop this next week.

I have a contract on a custom home builder's spec house. Set to close mid April. So far, everything looks good. Since my mid score is only 15 points below 680, I will be rapid rescoring 2 CC's I just paid off and 1 paid down (still at 40% util) in an attempt to get the mid score above 680. So, I still have not locked a rate on a 30 yr term. I'm really hoping to get at or below 6%. I will be putting 20% down. If interested, pictures are here: http://picasaweb.google.com/doug.millsaps/...key=lGGgkvVAC1A This is what you can get in central Texas for $289k. 2410 sf 1 ac lot I wanted to thank Shane (liverichly) for of his help last spring when I started this process. He was very helpful and we had several long email exchanges back then. Very educational. With that being said, I ended up going with a friend of the family who turns out to be a mortgage broker. At the time I started this process, I didn't even know he was an option. I also want to thank all the people here. There is a wealth of knowledge on this forum. [edit] They will probably pass the bill for $15k for new home buyers AFTER I close, therefore, probably won't qualify. Though, I can't really say I'm for the idea. But... if it is available, I would take it.