The VA Home Loan has gotten a bad rap with sellers. This is largely due to outdated misinformation perpetuated by sellers and real estate professionals. Take a minute to join our free education program for aspiring military homeowners, Savvy Veteran Homebuyers.
So let’s dive in! Why are sellers wary of the VA Home Loan?
The primary reason sellers negatively view VA offers is because they believe it will cost them more money to sell their home. This myth is tied to three line items: buyer’s closing costs, wood pest infestation clearance and property condition guidelines.
Buyer’s Closing Costs:
A seller has no obligation to pay for a buyer’s closing costs regardless of the type of home loan that is being used. A buyer using conventional or FHA financing has the same right to ask for help with closing costs and the seller has the same right to decline. So this becomes a moot point.
Wood Pest Infestation Clearance Termite
The VA Home Loan requires a wood pest clearance prior to funding and closing the loan. This is typically not required for Conventional and FHA buyers, but how many homebuyers do you know that would be willing to move into a house that has an existing infestation or termites or visible damage from a previous infestation? VERY FEW! The desire to move into a home clean of pests is pretty universal to all homebuyers. To single out VA Buyers stating that they are the only individuals who will require or request a seller to provide them with a termite clearance prior to closing on the home is wishful thinking at best.
Property Condition Guidelines.
The VA Home Loan requires that the property meets certain condition guidelines to be eligible. The majority of homes fall well within lending guidelines. Not to mention, these guidelines almost mirror those required for FHA financing. So if a seller is citing property guidelines as a reason for not considering your offer, it’s probably because their thinking is outdated or misinformed about what those guidelines actually are. Have your real estate professional send over a list of the actual conditions that would make the property ineligible for VA financing. This should help the listing agent and seller see condition guidelines should not be a concern unless there are known defects to the property.
When it comes to sellers’ distorted perception of the VA Home Loan the answer is simple because they are worried it will cost them more compared to working with FHA and Conventional buyers. Discuss these reasons above with your Real Estate Professional so that you can craft a message to address these concerns with sellers if they arise.