If you want to sell a house on terms that would require a conventional mortgage and not a HUD/FHA type of mortgage, are you drastically limiting your market? What percentage of home buyers don't qualify for conventional mortgages but do qualify for HUD/FHA mortgages?
If it's a "starter" house (cheap and not very big) and the buyer might qualify for government assistance to buy it, what percentage of people who might want it would be in that category?
Basically I'm thinking there are two strategies to sell such a house. First, if it's not worth very much, and the market is slow, it might be better to sell it to an investor who wants to fix it up and rent it out, or to someone who wants to fix it up and live in it. Second, to take advantage of HUD/FHA/etc. Mortgages, etc., it might make sense to invest in fixing it up to make it qualify for those mortgages, and sell it for twice as much as it would have sold for. Assuming the amount of repairs investment it needs is almost as much as its present value. But if the market is slow, there is an implication the repairs investment might not have any return for a long time.
So the issue is whether it makes sense, in a moderately slow market, to fix up the house before selling it, given the above considerations. If you were facing such issues, how would you decide what to do?
Read more: Is it hard for a typical house buyer to get a conventional mortgage?
