Let's say I have a 100,000 house to sell.
and on the same day, I get 2 offers to purchase in a very dry market. Assuming the home is priced right.
The first offer comes in at 90,000 with a buyer obtaining a conventional mortgage. Pre-approved.
Then the 2nd offer comes in at 97,000 with the buyer obtaining a VA mortgage. also Pre-approved.
Which would you take? I've heard that VA appraisers ding the seller for every little thing and costs for minor repairs, delayed closing and seller paid closing costs and such outweigh the higher offer price.
If it were you.....would you shy away from selling to a buyer using a VA loan?
Just wondering... I would love feedback, especially from REL on this.
I have a VA loan on my current house. The VA appraiser only did a drive-by appraisal so he obviously could not make a list of repairs which became the responsibility of the sellers. We closed on the exact day agreed upon by both the sellers and us. And we did not ask the seller to pay our closing costs. What advice does your realtor have?
The VA appraiser is not from a different planet. He/she could be the same appraiser who did 2 other appraisal that day - conventional. The only difference is he or she has to
follow VA guidelines.
It not like the old days either, that the buyer can't pay this or that, and seller has to pay. Quite easy these days, as long as the buyer is qualified, the home appraises, and may take a week or two longer.
Go for the VA contract offer. However know your comps - it's your roadmap to equity position.This message has been edited. Last edited by: real estate lady,
I don't know if it's different now, but a physician I work with, who works for the VA hospital purchased his first home with a VA mortgage. The VA appraisal came in really low, about $20,000 less than what the MD even offered for the house. He couldn't make the difference up in cash, like we had to do once when a house didn't appraise for a conventional mortgage. So like REL said, make sure your house will appraise. Again, his story...not sure if that's still the way it is.
I realize that things have changed, since I had the misfortune to sell my home with a VA loan. but, my experience was so horrible, that whenever I sold homes after that I told the Realtor that I wouldn't accept anyone that came in on a VA LOan.
So, for me, sorry, I will not accept VA loans, they have too many problems for the seller.
REL is right VA loans are very much like any other loan these days. In certain markets you are cutting your buyer pool by as much as 50% by eliminating them.
VA buyers can appeal their appraisals the same as conv or FHA or they can come to the table with funds.
If the appraiser brought the value in low for VA more than likely if that same appraiser was called in for another loan it would be the same value.
VA and FHA loans are much easier these days on the seller as long as the buyer qualifies. Required Costs for the seller, for the most part, are A THING OF THE PAST.
Let's turn the tables. Let's say you are a qualified buyer, ready and able to purchase a condo with a convention 80/20 mortgage. You go through the process, pay for an inspection, etc. to find out - you can't purchase the condo because it doesn't meet lending standards.
Bad things happen on both sides of the table in real estate.
Josie, do you have an update for us?
Speaking of condos..yes be careful..first of all ~~~your Realtor should be smart enough to do her homework UPFRONT and know or find out the following:
a) Does the condo qualify for FHA/VA
b) What is the ownership to rental ratio in the
c) Is ther substantial reserves for community repair.
Item B and item C can even throw off a "conventional financing" transaction.This message has been edited. Last edited by: real estate lady,
VA/FHA loans are in place to make sure that quality homes are purchased with low out of pocket expense. When I say quality I mean the basics (roof needs replacing, electrical fire eminent, pipes damaged). These are basics that we should all be concerned with when selling or buying.
No home is perfect, there will be maintenance and issues. However, these programs are there to protect buyers from major repairs that could harm them or drain their wallets soon after purchase. The good thing is that with a conventional or VA buyer, all things are negotiable. If there was a major flag during inspection, the buyer could still negotiate the purchase of the property.
There is a risk with both. Talk to your Realtor about the conventional buyer's financing position, the seriousness of each buyer and then how to keep a backup in case one falls through.
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