VA Loan from a Seller's viewpoint

[Anonymous]

It depends on the company doing the approval.

A bad loan officer will write a pre-approval that has a chance to fail. It's the same with conventional.

In fact the VA loan is very lenient on income/ratio, rental income and credit scores for qualifying. There is one extra inspection and it entails all faucets are running, some other stuff.

Over all there isn't a reason to avoid a VA loan, in fact if they are properly pre-qualified it is more of a sure loan to obtain than a conventional.

[Anonymous]

I appreciate everyone responding so rapidly. FWIW I am not bitter about this. I am just kinda shaking my head here, amazed that my gut instincts panned out to be correct and my realtor kinda sorta blew it. I too wonder if there is more to the story, like in fact the buyer was actually quite far from qualifying for the loan amount. I am told he really wanted the house. I think he got a good price. He paid for the appraisal. So I do not think there was subterfuge involved, like he purposely sabotaged the deal.

When I wrote I would avoid buyers having a VA loan, I should clarify that I do not rule them out completely. But I think I might have more peace of mind if the VA borrower-buyer is putting down meaningful money. From the start the signs were that the buyer in this instance was stretched thin. E.g. asking me to loan him money for the appraisal, to be paid pack at closing (I refused). Also he was two days late submitting his earnest money. My realtor and I had some words over the latter. "Earnest" means /earnest/. To me, two days late is not a sign of being earnest about buying the house. The two times I bought a house, I always wrote an earnest money check accompanying the offer itself. After the earnest money delay, I emailed my realtor that there were too many signs this buyer may not turn out to be viable and directed my realtor to keep my house listed. She resisted, claiming rules prohibited this without the buyer's permission. I let it go, not wanting to ruffle the buyer's feathers, but was disgusted. My realtor lost a commission (so far), so I am sure she learned a lesson by not being more open, so to speak, to keeping my house listed.

I am aware there is always a chance things could change. I really did not lose any money but I may have lost the interest of another buyer in the last four weeks, and I am delayed in my plans to move. If this buyer somehow manages to qualify subsequently, I will post back. To all sellers and buyers: Always have a plan for recovering when a deal falls through. Good luck.

[Anonymous]

Anonymous wrote:I appreciate everyone responding so rapidly. FWIW I am not bitter about this. I am just kinda shaking my head here, amazed that my gut instincts panned out to be correct and my realtor kinda sorta blew it. I too wonder if there is more to the story, like in fact the buyer was actually quite far from qualifying for the loan amount. I am told he really wanted the house. I think he got a good price. He paid for the appraisal. So I do not think there was subterfuge involved, like he purposely sabotaged the deal.

When I wrote I would avoid buyers having a VA loan, I should clarify that I do not rule them out completely. But I think I might have more peace of mind if the VA borrower-buyer is putting down meaningful money. From the start the signs were that the buyer in this instance was stretched thin. E.g. asking me to loan him money for the appraisal, to be paid pack at closing (I refused). Also he was two days late submitting his earnest money. My realtor and I had some words over the latter. "Earnest" means /earnest/. To me, two days late is not a sign of being earnest about buying the house. The two times I bought a house, I always wrote an earnest money check accompanying the offer itself. After the earnest money delay, I emailed my realtor that there were too many signs this buyer may not turn out to be viable and directed my realtor to keep my house listed. She resisted, claiming rules prohibited this without the buyer's permission. I let it go, not wanting to ruffle the buyer's feathers, but was disgusted. My realtor lost a commission (so far), so I am sure she learned a lesson by not being more open, so to speak, to keeping my house listed.

I am aware there is always a chance things could change. I really did not lose any money but I may have lost the interest of another buyer in the last four weeks, and I am delayed in my plans to move. If this buyer somehow manages to qualify subsequently, I will post back. To all sellers and buyers: Always have a plan for recovering when a deal falls through. Good luck.

I don't think you can say that it only applies to VA loans. This can apply to anyone and being "stretched" could still mean a conventional buyer is putting down 20% but is near the limit on everything else.

Point being it's the individual not he loan type.

[Anonymous]

Realtor here.

Your Realtor is correct - she can't keep the house actively listed. Violates the rules. Sorry.

$40 a month sounds ridiculous. I think the buyer probably jacked up his credit and his score went down from the pre-approval to now.

[Anonymous]

Anonymous wrote:I appreciate everyone responding so rapidly. FWIW I am not bitter about this. I am just kinda shaking my head here, amazed that my gut instincts panned out to be correct and my realtor kinda sorta blew it. I too wonder if there is more to the story, like in fact the buyer was actually quite far from qualifying for the loan amount. I am told he really wanted the house. I think he got a good price. He paid for the appraisal. So I do not think there was subterfuge involved, like he purposely sabotaged the deal.

When I wrote I would avoid buyers having a VA loan, I should clarify that I do not rule them out completely. But I think I might have more peace of mind if the VA borrower-buyer is putting down meaningful money. From the start the signs were that the buyer in this instance was stretched thin. E.g. asking me to loan him money for the appraisal, to be paid pack at closing (I refused). Also he was two days late submitting his earnest money. My realtor and I had some words over the latter. "Earnest" means /earnest/. To me, two days late is not a sign of being earnest about buying the house. The two times I bought a house, I always wrote an earnest money check accompanying the offer itself. After the earnest money delay, I emailed my realtor that there were too many signs this buyer may not turn out to be viable and directed my realtor to keep my house listed. She resisted, claiming rules prohibited this without the buyer's permission. I let it go, not wanting to ruffle the buyer's feathers, but was disgusted. My realtor lost a commission (so far), so I am sure she learned a lesson by not being more open, so to speak, to keeping my house listed.

I am aware there is always a chance things could change. I really did not lose any money but I may have lost the interest of another buyer in the last four weeks, and I am delayed in my plans to move. If this buyer somehow manages to qualify subsequently, I will post back. To all sellers and buyers: Always have a plan for recovering when a deal falls through. Good luck.

There's your problem right there, not the VA loan. It sounds like someone in the process screwed up not to have screened this buyer out sooner. I'm sorry.

We used a VA loan to purchase this summer. We chose to make a very low down payment thanks to a previous financial loss during the housing crisis and not wanting to put down every dime we had. That also meant that if the appraisal had come back high, we had some wiggle room to bring cash to the table.

In our case, the VA inspector did ask for a repair that that our regular inspector did not. We were glad the seller was able and willing to do it. I think the cost was under $1,000.

We were really glad to have access to this loan option, and I think it also meant something to the seller to sell to a veteran.

[Anonymous]

Anonymous wrote:VA loan is a benefit given to veterans... why would anyone assume those using it are weaker buyers? It is garaunteed financing. Military and former military tend to be responsible.

The issue isn't weaker buyers. The issue is more hassle.

[Anonymous]

We've bought and sold using both VA and Conventional. I didn't really see much difference on either side other than maybe a little more paperwork on the VA loan.

[Anonymous]

support the troops, you people are disgusting

[Anonymous]

Anonymous wrote:support the troops, you people are disgusting

I don't think this means what you think it means.

[Anonymous]

It all comes down to the appraiser and what he/she says. It was stressful as a seller.

[Anonymous]

Anonymous wrote:It all comes down to the appraiser and what he/she says. It was stressful as a seller.

Isn't this always the case?

On the other hand if someone is putting down less money and has cash on hand they can use that extra cash to cover any appraisal differences.

[Anonymous]

All comments above read. Yes it is possible the buyer was not advised that he had no cushion and took actions that messed up his credit score. I blame the lender and VA process at present, but I know I could be mistaken to do so. Also I agree this does happen with non-VA lenders. I would hope the VA and its lenders took more care with veterans to ensure smooth sailing.

Per people's posts, in the future I will look for signs in the proposed agreement of a buyer who plans for a cushion.

Special call out of thanks to the person above who confirmed my house could not be relisted (without permission of both parties) while it has a purchase agreement on it.

For people's reference, my house was and remains in good shape. The inspection, even with the VA involved, raised only minor issues. I corrected all. Also I am not a DC urban/suburban seller. I googled a few weeks ago trying to get a feel for what the VA loan guarantee and so on is like these days and came upon this thread.

[Anonymous]

In the lender's "notice of action taken," the lender checked off the following reasons for terminating the loan application:

1. Income insufficient for amount of credit requested
2. Other-unable to meet VA residual income
3. Withdrawn by applicant

I thought #3 was odd but figured it was standard procedure and translated to the buyer was not going to continue trying to meet the requirements (via juggling things like credit card debt or vehicle financing). But my realtor noticed #3 above too and thought it a bit strange. Alternatively my realtor wonders whether the lender missed the $40 monthly HOA fee early on and will not admit its mistake. Any thoughts? I am trying to learn for the future. I think it would have taken some threats of legal action to get the buyer to give up his earnest money here (as a deterrent to bad faith conduct), and I would not want to go through the latter or have my reputation suffer in what was probably a lose-lose situation.

[Anonymous]

A VA loan is made to a Veteran. Are we not willing to put up with a bit of a hassle for someone who put their life on the line for us??

Signed

Disgusted

[Anonymous]

Anonymous wrote:A VA loan is made to a Veteran. Are we not willing to put up with a bit of a hassle for someone who put their life on the line for us??

Signed

Disgusted

No, I don't think it's unreasonable to draw the line somewhere when it comes to hassles/risks involved in such a large transaction.

That being said, DH and I have a VA loan. We both have excellent credit and when we purchased the entire progress was pretty hassle free.