VA Loan from a Seller's viewpoint
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Anonymous
| I have seen a few comments on here about VA loans and that they're a pain to deal with from a seller's standpoint. We have an offer on our house that is from a buyer with a VA loan. So what's the problem with these from a seller's standpoint? |
Anonymous
| If I remember correctly, you have to pay some of the closing costs. The LTV is very high, like maybe 97%, so the appraisal becomes very important, and you would be expected to decrease the price if the contract price isn't hit because the buyers usually don't have any wiggle room in their ability to pay. They usually are used by people who don't have much of a down payment, so that makes their willingness to walk away higher than someone who can put down at least 10-20%. |
Anonymous
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we used one to buy this past summer. I believe it was some more paperwork for both sides to sign and the VA home inspectors can be a bit more strict (although ours was NOT, which surprised us).
From our perspective, the VA Loan was an excellent way for us to finance our home. Since we were looking at homes that needed updates/renovation, we didn't want to put all of our money into a 20% down loan and then have nothing left over to fix the home. We put down 10% and don't have to pay PMI. Although this didn't wind up being an issue, we also had the option of putting down almost nothing and then readjusting our loan had our previous home not sold before we purchased - there is a several month period when you can put more money toward a VA Loan and not have to pay refinancing fees. We were solid buyers with excellent credit who easily could have qualified for a traditional loan, so don't discredit buyers using a VA Loan as automatically weaker buyers. They may be using it as we were - for the flexibility it offered that traditional loans did not. |
Anonymous
| 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. |
Anonymous
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Here's a good FAQ from the VA: http://www.benefits.va.gov/homeloans/lp.asp
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Anonymous
| low down pmt figures so that's an additional risk for all. |
Anonymous
using a VA doesn't automatically mean you're doing low down payment. Also, the question wasn't about the finances of the buyers - it was asking whether there was a problem with VA Loans from the seller's perspective. |
Anonymous
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Funny you should ask. We just went through this with our home in Arlington.
We had two offers within 48 or so hours. Offer 1: $15,000 earnest Offer was $7,000 above asking VA loan. Firm on this. Offer 2: $7,500 earnest Offer $1,000 above asking VA loan, BUT if this fell through they were willing to go "conventional." They were also going to put down 20% if they went conventional which means that they have some cash. We took the 2nd offer because our realtor was worried that the VA appraiser would appraise low. We are in S. Arlington and nothing in our neighborhood has gone above $675,000 except for new builds in a long time. It turns out (we found out today) that the house appraised for $750K (selling price). The buyers are beyond thrilled (Afghanistan War Vet and his wife), we are thrilled for them, and we are also breathing a huge sigh of relief. Granted, we paid 815K for the house in 2005 and put about 80K into it so while we are glad for the quick sale, etc. it's still bittersweet. |
Anonymous
The finances of the buyer are extremely important to the seller. Sales has got to close--do you know how many fall through because buyer's finances fall apart? |
Anonymous
| We're looking at buying with a VA loan in the next year and the ability to roll proceeds from a later sale into it without recasting is exactly the appeal. Inspections are rather strict but our experience is that's not been an issue on reasonably maintained, resident-occupied homes. |
Anonymous
| The appraisers can be weird, but just as weird as other appraisers. |
Anonymous
| It's November 20, 2013 and I wanted to post my recent experience as a seller. On October 20, I accepted an offer from a person pre-approved for the agreed upon purchase price of the house. We were to close on Nov. 21-22. One week ago, the appraisal came in at the purchase price or more and the VA approved the appraisal and inspection. Last week, I asked the buyer to postpone closing ten days, since planning was so difficult while neither buyer nor seller knows if the buyer can get his loan. Today, one day before the original agreed-upon closing date, the VA turned its client down for a loan. The buyer is $40 short a month for qualifying. I re-list tomorrow. I would say that the cautions about VA loans should be heeded. I will avoid buyers having them. If the VA wants sellers to take its loan-guarantees to vets seriously, then the VA and its minion lenders should do their homework in a timely fashion. I am disappointed but not shattered. OTOH I bet the buyer, a vet, is shattered. |
Anonymous
| We just accepted a VA offer a few days ago as well. Also in S. Arlington. I have my fingers crossed things will work out, but I am worried about the appraisal. My Realtor has been in constant contact with the buyers bank and they said the buyers should have no problem qualifying. But, as you just experienced, I won't be happy until closing day. |
Anonymous
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that stinks, 20:27. I was the previous poster who used a VA Loan in 2011. I find that very strange that they did not do a thorough pre-approval on your failed buyer. To have it come down to $40/month? Something seems wrong here, and I'm not sure how that could have happened.
I just want to remind people that not every VA Buyer is a risk. It has to be a case by case basis. |
Anonymous
I agree. It sounds like there is more to the story than meets the eye. |