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We have been casually talking to agents and whatnot. Whenever I mention using a VA loan it's like they become scared/annoyed/frustrated. They tell me that many seller would not consider my offer (should I find a home I want to buy) solely because of the VA loan. Why??
I'm not understanding why me using a VA loan would be any different than someone using FHA (save for the VA inspector coming out). If I had to sell a home I would imagine id be happy to get a solid offer, so why would the type of financing the buyer used come into effect?
It comes into effect when agents don't educate their sellers about VA loans and allow the fears/myths that have been floating around for years to continue. Just today I had a buyer come to my listing; she was upset because even though she liked the house, it was built in 1974 and her agent told her it was not possible to buy a home built prior to 1978 with a VA loan. NOT TRUE!
I think it is enormously important to work with agents who understand VA loans; and if you are active military to work with an agent who speaks "military". If you are looking at fixer uppers; it will be hard to use a VA loan. The homes really need to be in fairly good condition; which, I'm assuming you like a roof to function as it should anyway. Otherwise, for sellers, a VA loan should not be something to fear; there is a small extra step (VA appraisal/inspection) but it in no way obligates the seller to pay anything extra (with the exception of a $40 termite inspection).
Are you located near a military base or a federal employer/contractor? Agents in those areas are typically well versed on VA loans and don't even blink when it comes up.
In some places in CA it is customary for the appraisal contingency (meaning house has to appraise at contract price or higher) to be waived during hot markets. VA doesn't allow a borrower to agree to that term, and sellers will often get irked when they have to sign that document later in the process.
Some sellers and agents just aren't familiar with them so they use lenders that don't know what they are doing. For example with VA loans, not only do they look at debt to income ratios they also have a "persons in household" adjustment and a "home maintenance" adjustment which must be considered in the approval amount. I've seen lenders give approval letters that haven't taken those into consideration and sometimes it means the buyer doesn't qualify.
I've also seen agents tell sellers VA loans are hard to deal with. They aren't at all if you have agents and lenders that know the process.
So, find an agent that works with a lot of vets and they won't be freaked out by them. They can also generally tell you what issues an appraiser will call out so you can add those repair requests early on in the process. It is less frustrating to the seller to ask for peeling paint to be corrected with the initial offer for example.
We have been casually talking to agents and whatnot. Whenever I mention using a VA loan it's like they become scared/annoyed/frustrated. They tell me that many seller would not consider my offer (should I find a home I want to buy) solely because of the VA loan. Why??
I'm not understanding why me using a VA loan would be any different than someone using FHA (save for the VA inspector coming out). If I had to sell a home I would imagine id be happy to get a solid offer, so why would the type of financing the buyer used come into effect?
Maybe you're in a low price point and anything you find will have issues? VA loans, like FHA, will not allow pealing paint, rotted wood, or any safety hazards. Many people in lower price points can't afford to make the repairs that a VA appraiser will require them to make.
If you're in a higher price point and looking at homes that don't need a lot of work and aren't falling apart, that won't apply. Sellers have to pay termite, like stated above (though much more than $40 in my area), but sellers also have to pay for septic inspections and pumping if you're in an area with septic. That can be upwards of $400-1000 depending on where you are.
As long as sellers take into account their actual net, and not worry too much about the details of where the money is going within the contract, VA is easy to close.
We have been casually talking to agents and whatnot. Whenever I mention using a VA loan it's like they become scared/annoyed/frustrated. They tell me that many seller would not consider my offer (should I find a home I want to buy) solely because of the VA loan. Why??
I'm not understanding why me using a VA loan would be any different than someone using FHA (save for the VA inspector coming out). If I had to sell a home I would imagine id be happy to get a solid offer, so why would the type of financing the buyer used come into effect?
We turned down an offer made by a VA loan. And they were waaaaaaaaaaaay over asking price, and bumped it up when we turned it down. Basically, for the house to be approved for purchase under the terms of the loan we would have to completely renovate the house. Their inspectors can be ridiculous. We didn't want the headache so we went with the person willing to pay our asking price without all the additional bureaucracy.
Have your loan officer cross qualify you for a conventional loan, then you will have a conventional and a VA pre-approval letter. You can go with whatever loan YOU choose.
Sellers are leary of VA buyers because they do tend to take longer for escrow and yes, that VA inspector is dang picky. Some still believe they have to pay some closing costs for the buyer however, that is easily cleared up with the correct verbiage in the VA Financing Addendum.
Thank you for the sacrifice of your time and all the things you missed out on with your own family so that we can live safely with ours. I am a Military Relocation Professional myself, and a very proud mom of a retired Army veteran. I hope you find an agent that can help you.
VA requires a VA appraisal, not an inspection. The VA Minimum Property Requirements are the standards for the appraisal. The VA appraiser represents the VA, and will look everything associated or linked to meeting the MPRs.
VA guarantees part of the mortgage on behalf of the VA beneficiary, basically absorbing the risk and liability the lender doesn't take on. The guarantee creates the ability for the beneficiary to pay zero down and avoid PMI.
VA guaranteed products are underwritten and funded by lenders, so the buyer still has to meet a set of criteria to qualify--there is no magic to it, and a veteran with a certificate of eligibility still has to get approved for a mortgage.
The added step of a VA appraisal could extend the closing process. In some areas, the workload outpaces the number of appraisers, but the delay is not significant to most sellers.
If you know your property has major issues, don't turn your problems toward a type of loan program, especially since even a smart conventional buyer is going to hire a HOME INSPECTOR that will likely bring far more to the table than a VA appraiser.
To VA-approved buyers, remember to buy your own inspection--do not assume the VA appraisal covers you.
sellers also have to pay for septic inspections and pumping if you're in an area with septic. That can be upwards of $400-1000 depending on where you are.
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The only inspection fee that the VA mandates that a buyer cannot pay for is the termite. A buyer may pay for a septic inspection; which any buyer would/should do if buying a house with a septic anyway. I've had 2 VA buyers in the last year buy homes with septic systems and they've paid for the inspections. Is this perhaps state specific or a new regulation?
Many years ago, on the advise of our Realtor, we turned down an offer because it was a VA loan. First problem was we needed simultaneous closings and she was concerned that the VA loan wouldn't be able to close quickly enough. Second problem was that the potential buyer had increased hus offer several thousand dollars above asking, then included owner paid credits to cover his closing costs. The house wasn't likely to appraise for that amount.
I know we did the right thing FOR US, but it still bothers me a little.
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