Home Buying in 94553>Question Details

Claire Morris…, Home Buyer in Martinez, CA

Is it true that sellers don't want to bother with VA loans because VA imposes so many restrictions, i.e. seller has to pay all closing costs?

Asked by Claire Morris Dobie, Martinez, CA Tue Jan 7, 2014

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Allow me to amend my initial answer. The seller CAN pay all of the buyers closing costs but they are not required to do so. That is a matter of negotiating withy the seller. Typically the portion if buyers costs that the seller is required to pay amounts to around $2000 at most.

I have had great success in getting my VA offer accepted because I am good at explaining the process correctly to sellers agents. Educating them to the truth makes a big difference in improving your chances. Plus, I am a vet and I enjoy working with vets and I believe that makes a difference as well.
1 vote Thank Flag Link Tue Jan 7, 2014
Looks like you found a real estate agent. Let me know if you want to get pre-approved for your VA loan. I can have it to you in a few hours.

Alex Greer
Loan Officer
NMLS #1056079

Flag Thu Jan 9, 2014
So then, Neil, would you be a god agent to represent us? We are looking in the Contra Costa area, including Martinez, Pleasant Hill, Hercules, Pinole and Concord areas, in that order. We do have some miscommunication /errors to correct with VA, i.e. my husband was in the Navy and they have his DD-214 as Army, but we hope to get rolling by mid-February.
Flag Wed Jan 8, 2014
No, not if you have an agent that knows how to present it properly. Yes, if your agent/lender so not specialize in VA purchases.

J.R. Thrasher
1 vote Thank Flag Link Wed Jan 8, 2014
Assuming all of the real estate agents are experienced, I would say this is NOT true. However, what is true is the unspoken heirarchy of offers received. So for example, an all-cash, highest bidder is probably going to top every seller's list and trump just about everything else that comes in. That said, you cannot know what the other offers will be.

It is 2014 and too many of us have forgotten a time called 2008, when sellers would have LOVED to see any offer come through the door --- including VA and FHA offers.

You have to play the cards you're dealt. You can't control what you don't control (the seller). If you're a VA buyer, make sure YOUR agent understands and can represent your offer best. Eventually you will succeed if you continue to try. I have never known this to not be the case.

Rob Spinosa
1 vote Thank Flag Link Wed Jan 8, 2014
Wow these answers are a over the board. You can find the best buyer's agent out there but they have no control over a seller.
It really sucks but yes there are restrictions on a VA loan AND yes a seller does have to pay certain VA non allowables. Not to mention a lot of VA appraisals come in low because you have to get a VA certified appraiser (not a lot of them) and sometimes they have no idea on the specific area they are appraising.
If a seller has multiple offers usually the line of order goes cash, conventional, FHA, VA.
As an agent it's frustrating for me because you would think there was a better system in place for veterans. They want to protect veterans which is good but when it comes to a sellers' market VA loans are last on the list usually to get accepted.
Don't give up. Sometimes everything just falls in place and you will get the house you were meant to have.
1 vote Thank Flag Link Tue Jan 7, 2014
Hi Claire,

I've closed many VA loans, even in this current market, and I honestly believe having the right realtor is the key. You have to have a realtor who truly wants to work with a veteran. Interview realtors until you find one who is excited about working with you. If the realtor has experience working with veterans and enjoys it, you'll never hear them mention (to you) that the VA loan is a problem.

And believe it or not, there are sellers out there who feel really good about selling their homes to a veteran.

All the best,

Elva A. Wormley
Mortgage Consultant
(408) 615-8500
C2 Financial Corporation
2845 Moorpark Avenue, Suite 209
San Jose, CA 95128
NMLS #331981 / DRE #01274093
1 vote Thank Flag Link Tue Jan 7, 2014
I have run up against, unfortunately, many sellers and agents that I consider ignorant of current VA and FHA loans.... and who are old-fashioned prejudiced against them. I agree with Neil Case that educating the sellers/agents can often help (I just closed a VA loan this month, and the lender Land Home Financial calling and convincing the Listing Agent of their experience and confidence about closing VA was a pivotal issue in them finally choosing us.)

Unfortunately, with a FHA or VA loan you are often just going to run into old prejudices. I suggest you use a lender local to where you are buying (NOT 1-800 loans) which will be a big factor in assuaging the fears of the listing agent. I also suggest you use a Realtor confident and experienced in closing FHA and VA loans. Not because those loans are so terrible (they arent!), but because your agent may need to be able to convince the listing agent of that fact.
0 votes Thank Flag Link Mon Jul 13, 2015
A little late with my answer but I closed three VA and Cal Vet deals in the last 6 months, the Cal Vet in 23 days which I was not expecting, a good lender is essential in these deals. In one of VA deals we beat six offers including all cash, We had the highest offer and we put a 3% deposit in to show good faith and used it
for closing costs at the end, I also presented the offer in person, I am not a big fan of sending email
offers with no contact with listing agent. The VA is a great loan program which we all should be embracing.
0 votes Thank Flag Link Sun Mar 9, 2014
Claire: As a lender, there is no reason a seller should want to shun the VA buyer for any other reason than no understanding the 'restrictions'.
There are no real restrictions to the seller specifically.
There are guidelines that state the VA buyer cannot pay for certain fees.
In a seller's market, such as we have, the seller does not want to have to pitch in for these fees, so someone, aside from the Veteran, must pay for these.
What I do, as your lender, is give you a lender credit for these fees.
In essence, as a Veteran, you can go in with zero down payment and have all your closing costs credited to you from your lender. This does result in a silghtly higher intererest rate, but it gets you in and the seller is not out of pocket any money.
Although my loans are processed out of our Fremont location, I am happy to meet with you at your home or our other satelite offices!

Please contact me at claudia@divmg.com and we can discuss in detail.
0 votes Thank Flag Link Thu Jan 9, 2014
Not true that sellers are required to pay closing costs on FHA/VA loans....it's not about restrictions but more likely because of requirements to get certain repairs done that usually fall upon the seller to complete. such repairs are typical of FHA requirements. Restrictions are not the same thing as requirements

Although buyers may be willing to do certain repairs AFTER the sale, they are not willing to take responsibility for them BEFORE they even own the property. But they can't get the loan unless those things are done. As such, they ask the sellers to undertake the repairs. Most sellers would rather not, specially if there are other buyers who are either paying in cash, or getting a conventional loan with less stringent requirements. Sometimes, price isn't the only determining factor when a seller chooses whose offer to accept.
0 votes Thank Flag Link Tue Jan 7, 2014
The biggest reason why sellers don't want to deal with VA buyers And VA buyers agents is because they don't really understand the VA loan process. Very few people actually do. For instance it is absolutely NOT true that the seller must pay ALL of the buyers closing costs. There are indeed certain fees and inspections that the seller must pay for but that does not include or cover all of the buyers closing costs.

If you happen to be a VA buyer it is absolutely critical that you have a loan agent and the buyers agent who understand the real truth about the VA loan process.
0 votes Thank Flag Link Tue Jan 7, 2014
Hi Claire
I have closed more than a few VA loans and there have never been any problems. There restrictions are almost exactly the same as FHA. Seller does nto have to pay closing costs.
0 votes Thank Flag Link Tue Jan 7, 2014
Seller does not have to pay the closing costs. And it is true that a VA back offer is one of the last to be accepted so you have to be the highest bidder.

Alex Greer
Loan Officer
NMLS #1056079

0 votes Thank Flag Link Tue Jan 7, 2014
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