Today I want to share a little information that can help you, as a seller of a Bossier or Shreveport area home, have a good outcome as it relates to your attempt to sell your home & receive top dollar. I want to talk specifically about the types of financing that buyers in our market have been using & how that can affect your bottom line. First let me give you a quick synopsis of the types of loans that buyers have been using to purchase homes & the market share of each type of loan used in the Shreveport/Bossier City area for the year 2014*.
Conventional - 35%
Cash - 23%
FHA - 19%
VA - 15%
RD - 6%
Owner - 2%
So, as you can see above, the predominate way that Bossier homes & Shreveport homes have sold this year has been with buyers using a conventional loan. With that said, I'd like to give you a quick run-down on my thoughts on each of these types of loans & hopefully it will give you some insight in how to proceed & what you'll be up against when in negotiations with potential buyers for your home.
If I were a seller this is how I would rank my favorite types of loans that I would want to see a potential buyer use:
1) Cash - Cash is still king & provides by far the most surety of sale out of all of the ways to purchase property. You can close quickly & there is no appraisal required nor hoops for the buyer to jump through to receive the funds to close.
2) Conventional - I would rank this #2 due to it's ease of use. This loan type can be closed quickly (under 30 days) by buyer's lender & appraisers for this type of loan are generally liberal with their appraisal values & are the most apt to overlook conditional issues with the property.
3) FHA - I would rank this here due to it's generally quick closing time-frame (30 days) and relatively liberal appraisal values. I would prefer a conventional loan as a seller but not by much. With the recent return of down payment assistance which is generally combined with this type of loan you have to be cognizant about how many parties will have to give their approval for the loan to successfully close. Red-tape can derail this loan type.
4) VA - This loan is primarily used by retired or active members of the armed forces. It is a no-down payment loan & due to that they tend to veer toward being super-conservative with their appraisal values. If I'm a seller with a swimming pool or with a really nice home that is selling for a top price for my neighborhood then this is not the type of loan that I want to see a buyer utilize as the potentially low appraisal can jack up your bottom line. As an illustration, if I were to sell a $250,000 home with a swimming pool to a buyer, a conventional appraiser will give me credit on the appraisal for the pool for between $20k-$25k. On the exact same home a VA appraiser might only give me a credit of $8k thus substantially lowering my bottom line. It can close relatively quickly though but the home needs to be in good condition to pass the VA inspection.
5) RD - This loan is similar to the VA loan in that it is a no-money down program for buyers. This type of appraisal is a little more conservative than an FHA or conventional appraisal but more liberal than a VA loan. It is primarily used outside of the city limits of Shreveport & Bossier in areas such as: Stonewall, Haughton, Benton, Greenwood, Blanchard, Mooringsport, & Keithville. It is a federal program to help sales in rural areas but it is administered by each individual state. In our market, Rural Development loans are currently taking more than 60 days to close as the state does not have enough employees working on the files thus creating a backlog of over 30 days at the RD office in Central Louisiana.
I could get more technical & detailed with each type but due to time constraints I'm going to end this post. With that said feel free to contact me with questions or concerns about our market or any Shreveport or Bossier area homes for sale as I'd be happy to assist you in any way possible. Feel free to look around teamlytle.com for more current real estate info & the latest homes for sale.
*According to data pulled from the Northwest Louisiana Association of Realtors MLS system