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Real estate markets in many areas of the country, especially major metropolitan areas, have experienced a dearth of inventory. In many cases, the seller will have several competing offers to choose from, plus it may be difficult for the experienced buyer to find a homeowner who will accept an offer using VA financing. Based on past issues from experienced buyers, several strategies will be described on how to make your VA offer competitive with other types of financing, such as traditional or FHA offers. You may want to discuss your options with your loan officer to increase your chances of getting your offer accepted.
There are generally 5 main areas of concern:
1) closing cost
2) Misunderstanding of mandatory duty
3) VA Appraisal Versus Traditional Appraisal or FHA Appraisal
4) The offer with more money is more attractive to the seller
5) VA proposal requires termite clearance
These 5 issues will be explained in more detail in this article. Understanding these 5 common areas of misperception will increase your chances of getting an accepted proposal.
Many veterans need help with their closing costs. In a seller’s market, instead of asking a seller to help pay your closing costs, it would be wiser for you to ask your lender to raise your interest rate, and a lender to cover the closing costs. request for. With regard to additional fees, many agents have the misconception that a seller will be responsible for mandatory fees.
This group of fees includes: escrow, processing and underwriting. VA guidelines state that these fees are a seller’s responsibility when the lender is charging 1 point loan origination, (which is rare in today’s lending environment).
This concern needs to be addressed so that all parties have an accurate understanding of the VA guidelines. VA appraisals are generally considered stricter than traditional or FHA appraisals. The most significant misinterpretation is that a VA appraiser can request for more repairs on the subject property. In today’s lending world, due to stringent federal guidelines, conventional, FHA or VA loan appraisals are all using the same standards.
Many sellers find that a conventional offer with a 20% down payment appears to be a stronger offer than a VA loan with no down payment. It is believed that the offer with the highest down payment is more likely to close. If both buyers are pre-approved by an experienced loan officer, and the borrower information is pre-approved by Fannie Mae’s underwriting software, called Desktop Underwriting, they both have the same chance of closing. Is.
The only area VA loans may have a slight disadvantage is that the VA requires termite reports and clearances, but conventional and FHA loans do not. VA guidelines allow you to pay for the repairs, but not for the report itself. If the report is available and you are aware of the costs, you can offer to pay for the repairs. If the repairs are expensive and the seller elects to decline the repairs, this may be a home you need to move.
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