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Old 06-07-2009, 01:54 PM
 
4 posts, read 13,224 times
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My husband and I found a house in Suffolk county that we would like to place an offer on. My husband is a veteran and so we qualify for a VA lon with NO money down.

Our realtor is telling us that even though we qualify for VA with no money that we still have to put at minimum $5,000 down or come up with all the closing cost upfront. She is telling us that no one not a seller or an attorney will let us enter into contract because we are considered a risk.

We are first time home buyers and I just want to know if anyone can shed more light on this information we have received.

Thanks
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Old 06-07-2009, 02:38 PM
 
Location: Huntington
1,172 posts, read 3,160,307 times
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So, here you're thinking that since you qualify for a VA mortgage which requires no money down, you're thinking any seller is going to welcome a deal with nothing down. These are two different points of view. That downpayment which the VA doesn't require, but what a seller would require or there's no deal usually, not only shows you're sincere about the deal and really want the house and you're not playing games (many, many gameplayers out there in this RE market), but part of the downpayment will cover the costs of running the house while it's under contract if the deal goes south. Put yourself in the seller's shoes for a moment:

The seller would want some $ put down because if you as the buyer without a downpayment would want to wiggle out of the signed contract and succeed somehow, the seller wouldn't be able to recoup any downpayment (since there wouldn't be any) to cover his expenses of running the house while it was under contract. And you, as the buyer and under contract, would be tying the seller's house up for what could be a few months, and thereby taking the house off the market so it couldn't be shown to any other prospective buyers. A few months' running time costs $ - upkeep, utilities, RE taxes, etc. Plus if your deal without a downpayment fell through, the seller would lose out on all that time to try and show and sell the house.

And the seller's lawyer would watch out for their client - I really don't think a RE lawyer would advise a client/seller to accept a deal with no $ down. It's foolish and risky - people can't be trusted today at all, especially in this awful-everyone-out-for-themselves market. Many, many selfish people out to swindle a naive/trusting seller.

So, in a way, your no-downpayment VA mortgage doesn't do you a whole lot of good when the house that's for sale is actually owned by a person who is looking out for their own interests, just like you are.

Perhaps no downpayment would be the thing for a foreclosure property since the property would basically be owned by the bank who would want it off their books no matter what.

Perhaps one of the realtors out there in City-Data land would be able to explain this a little more clearly than I did. But in any event, I hope this helped a bit.
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Old 06-07-2009, 03:15 PM
 
9,341 posts, read 25,938,637 times
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Quote:
Originally Posted by AndreaII View Post
So, here you're thinking that since you qualify for a VA mortgage which requires no money down, you're thinking any seller is going to welcome a deal with nothing down. ...

Good post, AndreaII.
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Old 06-07-2009, 04:25 PM
 
Location: Long Island
9,296 posts, read 19,585,953 times
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Excellent post, AndreaII!
Price is only part of the deal - terms are the rest of the deal, including downpayment. Especially in this market, Sellers (or their attorneys) want the Buyers to have some "skin" in the game, something to lose if they want to change their mind...
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Old 06-07-2009, 04:56 PM
 
1,615 posts, read 3,223,603 times
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Quote:
Originally Posted by mdukes View Post
My husband and I found a house in Suffolk county that we would like to place an offer on. My husband is a veteran and so we qualify for a VA lon with NO money down.

Our realtor is telling us that even though we qualify for VA with no money that we still have to put at minimum $5,000 down or come up with all the closing cost upfront. She is telling us that no one not a seller or an attorney will let us enter into contract because we are considered a risk.

We are first time home buyers and I just want to know if anyone can shed more light on this information we have received.

Thanks
God bless your husband and thank him for his service to our country. Be advised that the $8,000 dollar tax refund for first time homeowners may be used by your broker towards closing costs. Also be advised that there are plenty of sellers DESPERATE to sell their overpriced "sheds" because prices continue to swirl down the drain. Just stay focused and motivated and you'll get what you want. Don't be afraid to lowball.
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Old 06-07-2009, 05:32 PM
 
Location: East Northport
3,304 posts, read 8,540,241 times
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The seller will want you to put some money down to secure the contract in case you default. Even though you are getting a no money down mortgage, the seller will want to protect himself.
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Old 06-07-2009, 06:00 PM
 
Location: Massapequa, NY
1,056 posts, read 1,720,148 times
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Quote:
Originally Posted by LongIslandCitizen View Post
God bless your husband and thank him for his service to our country. Be advised that the $8,000 dollar tax refund for first time homeowners may be used by your broker towards closing costs. Also be advised that there are plenty of sellers DESPERATE to sell their overpriced "sheds" because prices continue to swirl down the drain. Just stay focused and motivated and you'll get what you want. Don't be afraid to lowball.
i wouldnt say prices are going down. they reported the prices actually have risen in May.
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Old 06-07-2009, 07:06 PM
 
1,615 posts, read 3,223,603 times
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Quote:
Originally Posted by KENNY GUIDO View Post
i wouldnt say prices are going down. they reported the prices actually have risen in May.
hold on there. Nothing but the normal springtime anomoly but I appreciate that your an optimist. There are a ton of threads on this subject so lets not go off on a tangent together into the woods.

As for the down payment the bridge loan of $8000.00 applies to that also.
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Old 06-07-2009, 08:51 PM
 
Location: Long Island
9,296 posts, read 19,585,953 times
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Quote:
Originally Posted by LongIslandCitizen View Post

As for the down payment the bridge loan of $8000.00 applies to that also.

I don't want to discourage anyone from buying a home and applaud the special consideration given to Vets.

Having said that, your comment re the $8,000 being applied to the down payment is correct (as I've posted in another thread), but has nothing to do with what Tom or I said in our posts about the Sellers wanting some money from the Buyer at risk--that's the "Earnest Money", usually part of the down payment, paid at signing of the contract, which goes into escrow with the Sellers' attorney.
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Old 06-07-2009, 10:31 PM
 
Location: I'm gettin' there
2,578 posts, read 6,381,359 times
Reputation: 747
Quote:
Originally Posted by KENNY GUIDO View Post
i wouldnt say prices are going down. they reported the prices actually have risen in May.
Lets make sure we know the facts and not just make one liners....

What prices did you have in mind ? does this pertain to Long Island ? or california and florida ? totally different scenarios...
if 500k houses are selling for $400k then the median sale price is 400k.... get it ?
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