Home Buying in Oakland>Question Details

Thomas B, Home Buyer in Oakland, CA

Is using a VA loan possible in Oakland?

Asked by Thomas B, Oakland, CA Sat Dec 28, 2013

Hello, I'm a recently married veteran in Oakland. My wife and I are looking to buy our first home. A few months before I was married, I was pre-approved for a $575k VA loan through BofA. If I factor in my wife's income, we can theoretically afford more than $575K, but we would prefer to not go higher than that. We can afford a down payment in the 5-10% range.

After going to various open houses, realtors don't seem happy when I mention the VA loan. What gives? I understand VA loans require a 45 day closing period. I would love to hear the opinions of realtors in the Oakland area on VA loans.

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Answers

8
The guidelines are strict. Some Realtors may have had a bad experience because of that. Reality, most loan programs have strict guidelines now. That's why I enjoy working with a company that can finance a property and assist clients with their property search.

Keith Bosworth
Arise Realty and Ascend Mortgage
510-931-3197
http://www.ariserealty.com
http://www.ascendmortgage.com
0 votes Thank Flag Link Wed Jan 29, 2014
Hello Thomas,

Real estate agents do not understand the VA loan.
You need a professional loan agent to not only preapprove your loan, but articulate to agents that a VA lona does not need to be the headache they believe it to be.

VA does not require 45 days. As a direct lender (we sell direct to VA, so no middle man.

Once we preapprove your loan, all we need is an appraisal. This is where the system bogs a little.
The VA appraiser has 7business days to get the appraisal back to us. If we order it immediately, we will receive it back in time for a 10 day appraisal contingency removal.

I recently closed a VA transaction where the listing agent was very concerned about our being a VA loan. She called me and I asked her what her concerns were with the VA loan. It was two fold:

1. Seller has to pay non allowable fees for Veteran (these fees were paid by the lender as a credit)
2. Appraisal requirements (not any more stringent than a conventional loan)

There is a termite report and clearance required on VA properties. If the property is in disrepair this could be an issue.

Please feel free to contact me and we can discuss this at greater length.
I would prefer the VA loan for you (no mortgage insurance), but with 5-10% down, we may be able to have options.

I would be happy to help! VA loans are EZ!
0 votes Thank Flag Link Mon Dec 30, 2013
You need to get pre-approved for your VA loan to ease the pain a little. But VA appraisals are what they are afraid of. They are very conservative and particular.

Alex Greer
Loan Officer
NMLS #1056079
http://www.TheMortgageOutlet.com

408-352-5147
AGreer@TheMortgageOutlet.com
0 votes Thank Flag Link Sun Dec 29, 2013
Like Kenny, I have closed multiple VA loan purchases in Oakland and meet buyers regularly who would like to purchase with VA loans. There are also many lenders who offer them.
When sellers have multiple offers, they look for those with a good price, but also those that have the best chance of completing the purchase during the planned escrow period.
Any special circumstances can appear riskier to a seller. For a VA loan, the pest report is a factor and so is the smaller number of available VA appraisers. Non-VA loans usually close in 30 days or less in this area. There are strategies for minimizing the importance of those factors, including well-remodeled homes.
Karen Nelsen 510-912-8681 KarenN@apr.com
0 votes Thank Flag Link Sat Dec 28, 2013
Hi Thomas,

VA loans are definitely doable, but they can be more challenging than with FHA or conventional financing. What I have found to be the real challenge is with a VA loan the property has to have a clear pest and per the loan requirements, you the buyer, is not allowed to pay for repairs if they are needed. This seems to be the biggest hurdle. The 45 day escrow when compared with a standard 30 is also a little tougher.

Much of the housing stock in Oakland is older, and finding homes with some pest work is not uncommon. Add in that it has been more competitive for buyers, this makes the VA loan a bit tougher to work with.

That being said, there are homes that are options. You will probably need to look at homes that have been recently renovated or have had the pest cleared (there are some out there). Also you may want to consider a townhome as well (not sure what you and your wife are looking for).

I do know of a few renovated homes that might be an option depending on where you are looking.

If you would like some further information, please do not hesitate to contact me.

Hope that helps!

Lisa Cartolano
Alain Pinel Realtors
http://www.ViewOaklandHomes.com
Lic 01715440
0 votes Thank Flag Link Sat Dec 28, 2013
Hi, Thomas. You are correct that many real estate agents are leery of VA financing. The reality is that VA loans do not take more than 30 days to close, but there is a perception that they require a longer closing period. Here's the important issue: VA loans require that the property be delivered to the buyer at closing with a clear termite report. Most homes in Oakland are older homes that have not had a termite clearance recently so they almost always have some sort of issue that turns up on a termite report. If the issue in question is not very costly it can be cleared quickly with low cost to the seller, but if it's a much larger issue the seller won't want to do that work unless they are certain that the sale is going to close. That brings us to the second issue: VA buyers typically put zero money down. Sellers are concerned about this also because it means that there is no room for error if the property appraisal comes in less than purchase price (a rare event, but it happens sometimes). So, VA buyers do face some obstacles. One can get non-VA financing at that purchase price level with 3.5 - 10% down, and those options don't automatically require a termite clearance, so you might want to look at those possibilities when the property has a larger termite report. Feel free to contact me to discuss further!

John Holmgren
0 votes Thank Flag Link Sat Dec 28, 2013
Very possible to, as I have closed, and am currently in contract representing a VA buyer right now. There are obstacles to overcome such as a Section 1 clearance report, and the competitive of the market but is very possible. It will take teamwork between all parties, which includes the buyer, seller, selling agent, listing agent and lender. A 45 day close is the norm, but there are lenders that can get it done in as low as 27 days. There are other benefits as well that is not common knowledge. I attended a local VA workshop at the Oakland Association of Realtors which opened up my eyes to that there are a lot of VA buyers out there not utilizing this loan to their benefit.
Web Reference: http://fastagent.me
0 votes Thank Flag Link Sat Dec 28, 2013
Hi Thomas;

The other problem with a VA loan is that they require a clear section 1 of the pest report. Most of the housing stock in Oakland was built between 1904 and 1934. These are old homes, and most of them do have something in section 1 of the pest report. A $5000 section 1 pest report is not uncommon, When you stat looking at decks and older windows, this number quickly rises.

That is another reason why sellers and listing agents often do not consider a VA loan as something that will close. Add to that an extremely low inventory, and a lot of competition for homes on the market, a listing agent will ,ore likely chose a buyer who will be easier to close.

There are other options for you. You can look at recently remodeled or flipped homes that often have clear pest reports.

Your homne is out there. Just keep looking.
0 votes Thank Flag Link Sat Dec 28, 2013
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