On Monday – Memorial Day – I e-mailed the agents to set appointments, since only a couple of the properties were vacant. And on one, I also inquired whether the seller would accept a contract with a VA loan since neither FHA or VA was indicated.
Long story short – the seller wouldn’t work with any VA buyers. Enjoy your Memorial Day, when we remember the sacrifices … oh, never mind.
Why would a seller not work with a VA buyer? Here are a few thoughts …
VA Appraisal Issues
These can fall into one of two categories. Either the list price is pushing the upper end of the market and the listing agent, rather than appropriately price the home, has told the sellers to skip VA or FHA buyers because those appraisers tend to be a little more price sensitive (but less so now than before), or there are issues with the house that a VA appraiser would say need to be fixed before the loan can be funded.
VA loans are slightly different in that there are a number of (mostly) junk fees that the buyer isn’t permitted to pay. VA buyers aren’t nickeled and dimed all the way down the line; the veteran pays a funding fee (often rolled into the loan) and thus escapes extra fees added by buyers and escrow companies.
More often than not, the fees come in at somewhere between $1,000 and one percent of the purchase price. And since the seller has decided its more important to be a greedy jerk than assist a veteran in purchasing a home, VA loans are pushed to the side in the interest of getting full price without concessions.
But to blindly say no is akin to saying that only a full price offer will suffice. And if the seller’s thinking in those terms, and the listing agent is enabling that line of thought, there are a couple of villages missing idiots.
I can cop to this one, at least very, very early in my career when I didn’t know much of anything about VA loans. Rather than be faced with situations that I had zero idea how to handle, I simply skipped the VA checkbox when entering the listing and hoped no one with a VA loan wanted to purchase. Got lucky, there.
One or two VA loans, however, is all it takes to learn that it’s not a particularly complicated or expensive process. Yes, there are a number of things that VA appraisers look for – roofs with apparent issues, no apparent drywall repairs not completely repaired (including paint), rotting wood, peeling paint, missing built-in appliances … rather basic stuff, honestly. But nearly all are correctable in some way, shape or form. For instance, a roof certification may suffice rather than a full roof repair as the state of a roof, like many inspection items, often is in the eyes of the beholder.
And all of this points once again why it’s important to make sure you’re hiring an experienced agent to list, market and sell your home. Especially in this market, there are veterans who are trying to purchase homes and often in price points where homes aren’t moving quite as quickly.
Why would anyone in their right mind intentionally limit their pool of buyers (not to mention screw over a class of citizen who has helped guarantee our ability to be a selfish, ignorant jerk.)
If your listing agent doesn’t know how to handle VA loan contracts, get a different agent. It’s that simple.