Home Buying in 20152>Question Details

Lance, Home Buyer in Chantilly, VA

why do sellers not want to agree to a VA loan from a buyer?

Asked by Lance, Chantilly, VA Sun Feb 17, 2008

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susfree’s answer
We are going to lose our dream home today even though we are offering more money simply because we are using VA loan. So what does it mean that we offer more money and our lives in service to our country and then cannot even buy a home? The home we are bidding on is in great condition and neither we nor the seller anticipate problems with the appraisal. What kind of seller would do this? This seems rather unfair. Sad, sad, sad.
0 votes Thank Flag Link Fri Mar 21, 2014
VA Loan Tips

When applying for a VA home loan there are some advantages to having the VA on your side during the home buying process. Did you know that VA loans offer limitations on closing costs? The VA also offers leniency to qualified VA borrowers who are having temporary financial problems.

Other benefits of a VA home loan include long terms of repayment, prepayment rights (with certain guidelines) and under the right conditions, no down payment required. You are also entitled to get an accurate assessment of the reasonable property value of your proposed purchase. These are just a handful of the added benefits of applying for a VA home loan.

The VA has a great many ways to assist those seeking a VA mortgage, but there are also restrictions. When you purchase a home using a VA home loan, the VA does not offer guarantees that your home is free from defects. While the VA does conduct an appraisal of the property, this should not be misconstrued as an 'inspection' or approval of the condition of the property.

Reference Link: http://vastreamlinemortgage.net/va-mortgage-loan-advantages-…
3 votes Thank Flag Link Tue May 12, 2015
Work with a real estate professional and negotiate a purchase agreement. Make sure the purchase and sales agreement contains a "VA Option Clause."

Here's a sample of a "VA Option Clause":

"It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest money or otherwise be obligated to complete the purchase of the property described herein, if the contract purchase price or cost exceeds the reasonable value of the property established by the Department of Veterans Affairs. The purchaser shall, however, have the privilege and option of proceeding with the consummation of this contract without regard to the amount of the reasonable value established by the Department of Veterans Affairs."
http://valoanguidelines.org/

You may also want the purchase agreement to allow you to "escape" from the contract without penalty if you can't get a VA loan.
1 vote Thank Flag Link Wed May 20, 2015
Get your up to date VA information at the source: http://benefits.va.gov/homeloans/
1 vote Thank Flag Link Fri Mar 8, 2013
Pat Milligan thank you. We just lost out on our dream home. The seller(Regions Finanical corp) took a much lower offer than ours, because we were using a VA loan. Some snot nose banker deceided that waiting the few extra weeks for a va loan wasn't worth the banks time. Somehow Regains thinks thinks a few weeks of their time is worth more than the 23 yr my husband put in the Miltary. If discriminatuion is excluding or restricting members of one group from opportunities that are available to another group, then Yes Regiona Finanical discriminates against our Miltary families. They have a track record of taking lower non Va offers over offers with a VA or FHA attached.. I have head all the excusses about Va appraisers. BS this house was built in 2007, and that why regions has realestate agents to advice them. The bank was the house was in mint condition.We were even willing to pay for any repairs out of our 5000 earntest money funds close on time. I even offered a time is of the essence clause, so we would pay an extra 3000 if closing was delayed. And what about the family the house was foreclosed on and the pmi company. I don't think regions was acking in their best interest either. I think the banks satistic would prove regions is not offering the opportunity to Miltary Veternans as it is to conv loan & cash costumers. Regions is not Military friendly when it comes to sales of their bank owmed homes.
1 vote Thank Flag Link Mon Oct 31, 2011
I just lost on similar circumstances. Except I offered to guaranteed the loan to close in 25 days or less and pay any difference in funding. I was eleven grand above the asking price and I honestly believe the agent didn't even present my offer. This is the second time this has happened here in the Dallas area. I can go to an FHA if I want. However, I have used my VA before in Idaho and it was gladly accepted there where they honor veterans. Texas I am beginning to think is a lot of talk. I know for a fact that the inspections are not that much different.
Flag Tue Mar 22, 2016
I understand your frustration, but the Regions did not discriminate against you; they discriminated against your loan. From a seller's standpoint, there are differences between VA loans and conventional loans and the seller has the right to choose the most appealing offer. They are not obligated to turn other buyers away while waiting on loan which takes longer to get approval. If you were selling a car and Buyer 2 showed up with cash in hand, you wouldn't be required to hold the vehicle for Buyer 1 who'd said they'd be back in a week with the money. You could if you wanted to, but you'd risk losing out on the sale if Buyer 1 wasn't able to follow through. If you do not like the drawbacks of a VA loan, remember that you do not HAVE to purchase a house with one. I'm a veteran and I purchased my home with a conventional mortgage. If you are unable to do so and have to use a VA loan for credit or down payment reasons, that's not the seller's problem.
Flag Fri May 23, 2014
VA appraisers are much more conservative when calculating the value of the home - and - they have a tendency to condition for any minor imperfection with the home. We recently sold a home where the appraiser made the sller paint the trellis in the back yard where a rose bush was growing because some of the pain was peeling. Really??? How crazy was this? And then they wanted to see a permit for a garage on a house that was built in the 1950's. Needless to say it is always a headache for the seller.
1 vote Thank Flag Link Tue Feb 1, 2011
I have seen a lot of houses up for sale as i am in the market myself. and these houses up for sale for the most part are a disgrace, filthy, nasty, overgrown, unkept. Or the photos are terrible, And i mean terrible. so when you do see something nice everyone see's the same thing well taken photo's of a clean well maintained homes for sale. what does this tell you......
Flag Mon May 25, 2015
My experience is whether VA, FHA or conventional, the Seller ends up paying the same amount of Buyer contributions anyway. Unless the house is in poor condition, where the VA appraiser would require repairs not otherwise requested, the Seller is foolish not to take a VA buyer.
1 vote Thank Flag Link Sun Feb 17, 2008
Hi Pat! I realize this post was in 2008. But, we are planning to purchase with a VA loan in 2013. Glad to see your posts. VA loans are a more logical loan if you qualify. Why not? Bravo to you for being an educated broker!:)
Money is Money. Glad you know the difference. Maybe we need to have a class on people who are not realizing their options.
Flag Wed Oct 9, 2013
Government loans place additional financial and performance obligations on the seller. Certain "non-allowable" fees that are charged by the settlement and/or title companies must be paid by the seller. In addition, the VA appraisals are somewhat more detailed (and may be more expensive) and may require certain repairs that would normally be negotiable with conventional financing. Please feel free to contact me for more information.
Web Reference: http://www.yournovahome.net
1 vote Thank Flag Link Sun Feb 17, 2008
From a real estate agent's perspective and experience of over 25 years - VA loans are usually difficult/ lengthy process/ loans - it doesn't have anything to do with the veteran/buyer - It's the requirements and process of the loan itself. If a property is a "hot" property (good location, priced right & has interest) seller's normally do not offer VA or FHA terms for a myriad of reasons (appraisal issues, time to get loan closed, etc.) If there are 2 contracts, one VA and the other cash or conventional, the VA buyer more than likely will not get the property.

Buyer agents should explain up-front the hurdles that writing an offer with a VA loan terms will have if those terms aren't being offered on a listing. They should show VA buyers only properties that offer to deal with VA terms - that way, buyers already know a seller is willing to accept the VA loan and would avoid a lot of heartbreak up front. At very least, before showing a property not offering those terms, call and ask if VA terms would be considered before showing the property....
0 votes Thank Flag Link Thu Apr 7, 2016
They think they do not get the value they want on their home when it is a VA loan.
0 votes Thank Flag Link Wed Jun 10, 2015
I would never, EVER, EVER consider selling to another buyer on a VA loan. It was underappraised, despite the fact that we had valid comps and 2 very experienced realtors. We have wasted 2 months of hot market dates and now have our home entirely packed, so not in showing condition. We cannot afford to sell for the price that this inexperienced, slacker of an appraiser came in at. Now, a lovely Vet and his family have lost their dream home and we are very, very, VERY bitter. Shame on the VA for harming our servicemen and women.
0 votes Thank Flag Link Wed Jun 10, 2015
The VA knows that the housing market prices are going to collapse and don't want to be on the hook when their buyer disappears one night after the house is underwater and their jobs are gone.
Flag Fri Dec 18, 2015
We are experiencing just what Jlarkin237 has described! Many valid comps in this extremely attractive neighborhood of 10-11 year old homes, but the buyer's VA appraiser insisted on including one house in the neighborhood that was sold much lower due to that seller's corporate relocation. Resulted in appraisal coming in $15K lower than the previously negotiated price, and buyer's didn't want to pay more than the "appraisal value" (even though it is their choice, as I understand, and they are well aware of prices in the neighborhood, so they know it is a low appraisal). I don't understand how an appraiser can overlook 10 houses with a comparable price to include one house that sold lower due to a specific seller's unfortunate situation. Anyway, the house is going back on the market and we will not consider offers with VA loans!!
Flag Mon Oct 5, 2015
so its the appraisers fault not the va loan. shame on you for excluding future vets. poor country to be a vet in.
Flag Fri Jul 24, 2015
Most likely it comes down to time. Generally it takes a little longer to obtain a VA loan and maybe the sellers just want to have a quicker transaction.
0 votes Thank Flag Link Wed Jan 29, 2014
This question was posted Feb 2008.
Things have changed since 2008.
0 votes Thank Flag Link Thu Nov 14, 2013
Tell me how things work today, as we offered $10K more than another bidder but because we are VA they are getting dibs. The house is in wonderful condition and we foresee no problems with appraisal. Why are we being put off if willing and able to pay more? Very sad.
Flag Fri Mar 21, 2014
Well, I am selling my home - listed it and in 5 days had a full asking price offer. They inpsected and appraised and everybody is telling me happy happy and all that.

Now I start to worry because after all this I find out it is a VA loan - so I read here.

I am told that the inspector never saw a house as mine in better shape and it cost me less than
$ 15.00 dollars to fix his list ( put bleach in a drain, move a latch plate, fix insulation foam on aircon outside, and cover irrigation outside elec. plug-in. I am like thinking - nice but some cheesey nit-picks so now I gues that was a VA inspection - not so bad I guess.

So, looks like the answers here are good, my buyers are good and my realtor was right.

I know I got to keep the doors locked to keep the buyers from moving in and it is just the second week of this now.

Who knew? Is America Great or What?
0 votes Thank Flag Link Thu Nov 14, 2013
Our inspector said the same thing. We fixed the short list of things required. VA appraiser came in WAY below selling price. Everyone is screwed. VA loans are not friendly loans.
Flag Wed Jun 10, 2015
how long does it take to underwrite a va home loan once all the documents have been turned in by the processor? Our processor said she turned the loan in Monday and it is Thursday. Also, can we get a commitment without a appraisal? Obviously I know we need the appraisal, but can the loan be underwritten prior to having an appraisal? I just want to know we are good, pending the results of the appraisal.
0 votes Thank Flag Link Thu Nov 1, 2012
It is true that Veteran's Administration has a specific matrix that the appraiser's use to complete a VA appraisal, but we should ALL be excited about VA Loans: the seller, the listing agent, the selling agent and the VA Buyer! Sent from a trusted lender at Suntrust "VA is just about the BEST program out there with the most liberal guidelines of any loan program and some of the most qualified buyers." I couldn't agree more! If an agent is confused about the wonderful benefits of VA it is unfortunate for all of us!
0 votes Thank Flag Link Tue Apr 10, 2012
the honest answer here is that the seller probably knows of an issue with the home that a VA appraiser will catch and require to be repaired. When I have "rough" listings or homes with questionable repairs done to them I tend to shy away from Va buyers as well. The listing agent is employed to get that house sold, avoiding engaging with a buyer whos finance may present a problem is just wise strategy on the listing agents part. (sorry, probably not the answer you were looking for)
http://www.doughallrealestate.com
0 votes Thank Flag Link Tue Feb 1, 2011
Hello Lance:

The main reason that I see not accepting VA loans depends mostly on the condition of the home. If there are many issues with the home and they are selling the home in "As-Is" condition, accepting a VA loan is basically waisting their time and yours because the lender's appraiser will have many required repairs that the seller would be obligated to fix if they want your loan to be approved. They are attempting to avoid these repair issues. (Have you seen the condition of many of the foreclosures out there?) One option would be a FHA 203K loan if you find a home with many issues and they are not accepting VA or FHA loans. There are many lenders getting up to speed on these loans due to the foreclosure market. I have a list of these lenders on my website which I have referenced below.
0 votes Thank Flag Link Thu Feb 19, 2009
There is a lot of misinformation about the VA loan. For Zero Down Payment loans it's usually the best loan for eligible buyers. The lender fees, by law cannot be paid by the buyer, so the seller must pay them, but they can be limited to a reasonable amount in the VA Addendum, we use $400. Further, Homefinders pays the lender fees for our buyers as well as the home warranty and appraisal. VA appraisals can be tough but if VA appraiser finds a defect, they are things that a seller should have done before putting the house on the market.
0 votes Thank Flag Link Sat Mar 1, 2008
This is a buyers market in NOVA. Seller are accepting VA Loans all over the place. In the hot market a few years ago sellers didn't want to pay the VA Funding fee or felt that the appraisals for VA loans would be tougher. Now that isn't an issue. Sometimes it is an education process but if you are represented by a buyers agent and they are asking for closing cost assistance then make sure you are getting enough to cover the funding fee. In this market you should be looking at about 3% of the selling price as closing cost assistance.
Web Reference: http://cindyjoneshomes.com
0 votes Thank Flag Link Mon Feb 18, 2008
Again,like all of the real estate professionals here have pretty much covered it. However,it is a buyers market. There is still more supply than demand so buyers still have many options to choose from. So if you receive a good offer from your listing agent,I would advise you to take it. Why? Because you might not get a better offer than the buyer with a VA loan. You might not get a offer period if you turn down the buyer with a VA loan.
0 votes Thank Flag Link Mon Feb 18, 2008
In this market - buyers should be considering any offers that come across theirs desks. But to answer your question, the reason is that when the buyer uses a VA loan the seller has additional costs. The VA will not allow the buyer to pay certain costs - so these costs are moved over to the seller. Hence the reason. Good Luck
0 votes Thank Flag Link Sun Feb 17, 2008
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