Making homeownership more attainable has long been a perk of serving in the United States Military. Dating back to WWII, veterans have found assistance in finding and purchasing homes all over the country, and the VA Loan is a great product that offers veterans low interest rates, zero or low down payments, and favorable repayment terms.
But according to the National Association of Realtors, the share of VA loans has decreased to just 7% in May of 2021, from about 10% in past years. Some veterans are finding it challenging to obtain a home in this market, and it’s important to know that with the right team, and an educated Realtor® on your side, you can get your VA loan offer accepted.
First, here are a few myths that sometimes make listing agents steer their clients away from VA buyers:
MYTH 1 – Sellers pay buyers’ closing costs on VA loans – Just like other loans, everyone pays their own closing costs. In fact, closing costs can often be reduced for VA buyers as many title companies and real estate brokerages will waive or lower fees on both sides of the transaction
MYTH 2 – VA appraisals are always lower than conventional – VA lenders have the same process of choosing appraisers as conventional lenders, the appraisers have similar guidelines to work with, and if an appraisal does come in low, VA buyers often have the ability to contribute more cash as their money isn’t tied up in a down payment
MYTH 3 – VA loans take longer to close – Closing times always depend on the skill and knowledge of the lender, realtors, and title company, and how quickly the buyers are able to get the required documentation to their lender for approval
It’s important to get ahead of these myths, and if your Realtor® can establish a relationship with the listing agent, you’re already ahead of the game. A listing agent is the gate keeper to the seller…in this market, they’re responsible for sifting through multiple offers and providing pros and cons to each so that their seller will have the best chance of a positive outcome in selling their home. VA buyers make up about half of my business annually, and the first thing I do when I have a VA buyer is pick up the phone and start a conversation with the listing agent. It’s important that they know I understand the unique characteristics of a VA loan, and the best way to navigate the process so that the transaction closes on time and with no issues. The better your Realtor is at putting the listing agent at ease, the more likely that listing agent will be to present your offer in a positive light.
There are also a few things you can do as a buyer to make sure your offer is more attractive to a seller:
- Have your Realtor® find out from the list agent what terms are most attractive to the seller, and offer those from the start
- Do a quick video or write a letter to the seller and include family photos
- Get creative with your terms – include an escalatory addendum, offer to pay some of the seller’s moving expenses, or offer a larger escrow deposit
- Have your lender write a letter to the seller about your readiness and qualifications
The bottom line is that purchasing a home with a VA loan is an incredible option for veterans, and is entirely possible to get your offer accepted even in a sellers market. But you need to be prepared, and make sure you have an experienced agent working on your behalf. If you want more information on the process, get in touch with me.
To get pre-approved for a VA loan, click here.