Selling Your San Antonio FSBO to a VA or FHA Buyer: What Changes vs a Cash Deal

A large share of financed offers on Bexar County homes under about $400,000 come in on VA or FHA loans. That is even more true if your house sits within commuting distance of JBSA-Randolph on the east side, JBSA-Lackland on the southwest, or JBSA-Fort Sam Houston / Camp Bullis in the north-central corridor. As a FSBO seller you cannot treat these offers like a cash deal or even a conventional-loan deal. The appraisal is different, the repair triggers are different, and there are specific fees the seller may be required to pay that a conventional buyer would cover.

What follows is the practitioner-level breakdown: what actually changes in the paperwork, in the appraisal, and at the closing table when your FSBO buyer is using VA or FHA financing.

The addendum that governs the loan: TREC 40-11

Any financed offer on a TREC 20-17 One to Four Family Residential Contract (Resale) should include the Third Party Financing Addendum, TREC 40-11. Read Paragraph B carefully. The buyer checks the loan type — Conventional, FHA, VA, USDA, Reverse Mortgage, or Other — and fills in the maximum interest rate and origination the buyer will accept. If the boxes for VA or FHA are checked and the addendum is not attached, do not sign. Get the addendum on the contract before you go under contract.

Paragraph 2 of 40-11 has two separate contingencies people confuse:

• Buyer Approval — the buyer's ability to qualify for the loan. There is a deadline (typically negotiated at 15–21 days from the effective date). If the buyer cannot get approval and gives written notice by that deadline, the buyer terminates and gets the earnest money back.
• Property Approval — appraisal, lender-required repairs, insurability. This one has no fixed deadline in the form and effectively runs until closing. On a VA or FHA deal this is the contingency that bites sellers.

As a FSBO seller, do not shorten the Buyer Approval deadline just because the buyer says they are "pre-approved." Pre-approval is not underwriting. Give it a realistic window — 21 days is normal in Bexar County right now — so the buyer's lender can actually process before the earnest money becomes non-refundable on financing.

How the VA appraisal works — and what Tidewater means

A VA appraisal is ordered through the VA's portal by the buyer's lender and assigned to a VA-approved appraiser. Two things make it different from a conventional appraisal.

First, the appraiser checks the home against the VA's Minimum Property Requirements (MPRs). MPRs are safety and habitability standards: no exposed wiring, functional HVAC, no active roof leaks, no chipping paint on pre-1978 homes (that overlaps with the OP-L Lead-Based Paint Addendum obligations), safe water and sewer, no wood-destroying insect damage, adequate access. If the appraiser flags an MPR issue, the loan will not close until it is fixed and re-inspected. In Texas the VA appraisal almost always requires a WDI (termite) report, and lender custom in this market is that the seller pays for it.

Second, the VA appraiser can invoke the "Tidewater Initiative" if the appraisal is coming in below the contract price. Tidewater gives the buyer's lender 48 hours to provide additional comparable sales before the appraiser finalizes a low value. As the seller you can help — pull three or four recent closed comps in the same subdivision within the last 90 days and get them to the buyer's lender fast. This is the one moment where a FSBO seller who has been tracking neighborhood sales has a real edge.

If the VA appraisal still comes in low, you have three choices: reduce the price to the appraised value, split the difference with the buyer (they must bring the gap in cash — VA will not lend above appraised value), or terminate. The buyer has the right to terminate for a low VA appraisal under 40-11 and gets earnest money back.

How the FHA appraisal works — and the six-month case number problem

FHA also runs appraisals against Minimum Property Requirements, and they are similar but not identical to VA's. The FHA appraiser is looking hard at peeling paint on pre-1978 homes, handrails on stairs of three or more risers, GFCI outlets in wet areas on newer builds, roof life (generally two years remaining), and any obvious structural or moisture issues.

The part FSBO sellers often miss: the FHA case number attaches to the property, not to the buyer. If an FHA buyer walks after a low appraisal, that appraised value follows your house for six months. Any subsequent FHA buyer's lender will pull the same case number and the same value. Cash and conventional buyers are unaffected, but you have effectively lost the FHA buyer pool at the higher price for half a year. Consider that before you refuse to negotiate on a marginal FHA valuation.

Seller concessions: what VA and FHA let the buyer ask for

Loan type	Max seller-paid concessions	Notes
Conventional	Typically 3% (owner-occupied, <10% down); up to 6% at 10–25% down	Anything over goes toward price
FHA	Up to 6% of sales price	Covers closing costs, prepaids, discount points
VA	Up to 4% in "concessions" plus reasonable and customary closing costs	The 4% is separate from normal closing costs

A financed San Antonio buyer will often ask for 2–3% toward closing costs in Paragraph 12 of TREC 20-17. Do not just look at the top-line price. A $310,000 offer with $9,000 in seller-paid closing costs nets you the same as a $301,000 clean offer, minus the extra risk of appraisal problems on the higher price.

VA non-allowable fees the seller has to pay

This is where FSBO sellers get surprised at the closing table. On a VA loan, the buyer is prohibited by VA regulation from paying certain fees. If the fee exists on the closing disclosure, it rolls to the seller by default. In Texas the common ones are:

• Attorney fees for document preparation charged by the lender
• Escrow or settlement fees charged by the title company (in Texas title companies handle closing, so this shows up as the "escrow fee" line — often split or seller-paid on VA)
• Underwriting and processing fees the lender itemizes as non-allowable
• Termite/WDI inspection fee (regulatory in most cases, custom in others)

Before you sign a VA offer, ask the buyer's lender for a preliminary Loan Estimate and identify the non-allowables. On a $300,000 sale these can total $1,200 to $2,500 that a FSBO seller did not budget for.

Timeline reality: 30 to 45 days, not 21

Cash deals in Bexar County close in 10–14 days routinely. Conventional loans close in 25–30. VA and FHA in this market are running 30–45 days from effective date, and 45 is safer to write into Paragraph 9 of TREC 20-17. The bottlenecks are appraisal scheduling (VA panel appraisers are slower), MPR re-inspection if any repairs are called out, and — for VA — the Certificate of Eligibility and any funding fee documentation.

If you have a Seller's Temporary Residential Lease (TREC 15-6) planned because you need to stay after closing, the extended timeline may actually help you line up your next place.

What most people get wrong

• Treating "pre-approved" as underwritten. Pre-approval is a soft credit pull and a stated-income look. Real underwriting happens after contract. Keep the 40-11 Buyer Approval deadline at 21 days minimum.
• Refusing repairs the appraiser calls out. On VA and FHA, unrepaired MPR items mean the loan does not fund. You either fix them, reduce the price so the buyer can fix them and re-inspect, or the deal dies. You cannot bluff past an MPR call-out.
• Ignoring the FHA six-month case number. Killing an FHA deal over a $5,000 appraisal gap can freeze your list price against every future FHA buyer until the case number expires.
• Not asking for the lender's Loan Estimate before signing. VA non-allowables and FHA concession requests are visible on the LE. Look before you accept.
• Assuming the buyer pays for the WDI report. In Bexar County market custom, sellers pay on VA. Budget $85–$150.
• Missing the Tidewater window. When the buyer's lender calls saying the appraiser invoked Tidewater, you have 48 hours. Send closed comps, not active listings — VA appraisers only weight closed sales.

Where FSBO sellers should get help

A financed FSBO deal has more moving pieces than a cash deal, and the buyer's lender is not your advocate. If any of the following apply, get a Texas real estate attorney or a fee-for-service transaction coordinator involved: the appraisal comes in more than 3% low, the buyer requests repairs that touch structure or roof, the buyer's earnest money is disputed, or the closing disclosure shows fees you did not agree to. A one-hour attorney consult at $250–$400 is cheap compared to a botched VA closing.

If you are still deciding whether to list yourself or bring in help, RentInSA's FSBO resources at /list-your-home walk through the paperwork, and /agents lists local professionals who handle military-buyer transactions if you decide the VA or FHA side is more than you want to manage alone. More background reading on TREC forms and Bexar County closing mechanics is at /resources.