Home Buying in 46304>Question Details

Icehouse42, Home Buyer in 46304

Is there any reasons why a seller would not want to accept a VA loan from a mortgage lender?

Asked by Icehouse42, 46304 Mon Jan 28, 2013

I live in Indiana. I plan to apply for a VA loan through a mortgage lender who is VA approved and also is (Lapp) Lender Appraisal Program. I have heard that sellers sometimes don't want to deal with someone who is getting a VA loan. If this is true,what are the reasons as to why? Does the seller have to pay more for accepting VA loans..fees,points,etc...? Thank you.

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Mark Syberg’s answer
I also live and work in Indiana and I have never had a problem getting a VA loan approved even on a short sale property! If your looking for a fixer upper then no, you can pretty much forget about it. the VA now inspects by the same codes so as long as the house is in good shape and the seller is willing to correct a few things if they are found then you should not have any issues. Work with an agent and a good Mortgage person who knows VA loans. Good Luck,
1 vote Thank Flag Link Tue Jan 29, 2013
I personally have never had a problem getting one presented and closed on non short sales and non HUD homes.

Call and we will talk
1 vote Thank Flag Link Mon Jan 28, 2013
The most important is that your lender is a local, reputable lender that when your offer is presented, the listing agent will be comfortable and will be able to educate the seller when your offer is given to them. Your agent(if you dont have an agent to represent you, you should and one who knows how to write the offer for you correctly for Va), will present your offer and explain to the agent and seller you are going Va and have a pre-approval letter from local lender on hand. If written properly and presented properly and the seller's bottom line is agreeable to them, then their should be no problems as long as inspections and appraisals go accordingly.

If you need a trusted agent who has been around for 20 years locally in Northwest Indiana, please let me know and I will guide you all the way.

Realty Executives Premier
1 vote Thank Flag Link Mon Jan 28, 2013
Our experience with a Buyer getting a VA loan was a nightmare! First of all, it takes forever to get the home inspection and the appraisal was almost 4 weeks after that. Anyone considering accepting a VA loan be warned.....the appraised value on ours was almost $30,000 lower than the agreed contract sales price. Despite our realtor trying to have the appraiser re-evaluate his decision based on comps, he took an arbitrary approach and wouldn't consider changing his mind. Despite this hurdle, we pressed on because we had already signed a contract on another home and were ready to move forward. Less than 1 week before closing, our agent informed us that the Buyer's loan was rejected in spite of being told all through the process that everything was on track. How this disaster could have happened remains a mystery. You can imagine our heartbreak and frustration over this. Our belongings were half packed, utilities changed to another house out of state, movers arranged, and on and on. All we know is that the buyer's loan was rejected due to employment. This is an issue that should have been known 2 months ago...not 1 week from closing. We relied on these buyer's and their lender and the VA only to have the rug pulled out from under us. Additionally, we lost 2 months of other potential buyers while the house was off the market. We have since re-listed the house and my realtor knows we will never, never, ever accept a contract with a VA loan!
0 votes Thank Flag Link Sat Oct 12, 2013
That same scenario happened to us and the buyers used FHA so it's not just VA.
Flag Fri Dec 13, 2013
Honestly a lot of it can be contributed to misunderstanding of VA loans. A lot of real estate agents that have been in the business for years still think of VA loans as being difficult. The reality is they're not much harder than any other loan type today with the exception of possibly tougher home expectations. In the world of writing offers cash is king, then conventional loans, the the rest of the limited options in today's financing world!
0 votes Thank Flag Link Mon Jan 28, 2013
Okay, as a disabled vet with a VA loan on my own home, I can tell you that VA loans can be a real pain in the neck for all parties! First off, as said before, some sellers don't like to deal with the VA appraisal, which can be rigid and arbitrary. Second, the VA loan usually includes extra costs to the seller, the costs that the VA does not allow to be charged to the Vet. Sounds good for the Vet, right? Can be, but the VA is so rigid it can actually HURT the Vet. Short Sales, as mentioned previously are virtually impossible because the VA has not updated their process to account for them (and since there are so many out there, I consider that to be a significant disservice to the Vet, because it severely limits the options). When a seller is involved in a short sale it is often because they have no money to put into the sale, so for the VA to insist on the seller paying certain costs (even though the Vet has willingly and intelligently agreed to do so!!) makes no sense.

So...there are good reasons for a seller to avoid VA loans. In a seller's market, when bidding wars are raging, it is very common to see a seller opt for an offer that is NOT VA over one that IS.

Now, all that said...you can't beat the downpayment! And with some lenders the rates are unbeatable as well. But again, those are benefits for the buyer, not the seller. Best of luck in your transaction...
0 votes Thank Flag Link Mon Jan 28, 2013
It depends on the the seller, but the main reason why they wouldn't want to go with a VA loan is because to get the loan funded, the property has to go through a VA appraisal which has a reputation of being tougher than normal appraisals.

For this reason, it is often a waste of time to go after REOs with a VA loan. Short sales will be very difficult as well, because the seller is under financial strain and the keeping the house in perfect condition is not the highest of their priorities.

The seller wants the house sold with as little potential problems as possible. Often, they would prefer not to accept an offer and go through mountains of paperwork to, at the end, have the loan not be able to be funded and have the whole transaction fall apart.
0 votes Thank Flag Link Mon Jan 28, 2013
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