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.
Oh darn, I thought I updated, guess I didn't, so sorry.
So here's my story- My dad lived 500 miles way from me in this teeny tiny town of less than 200 people. After he got sick and moved close to me, I starting wondering about how in the world I would sell his house. I didn't have time off of work to do repairs or updates. After he passed away, my DH & I drove down to his house once and cleaned everything out.. we tossed all the "stuff"...donated all of everything else we could. We went back down a second time a month later and had a garage sale selling all of the furniture, surprisingly everything sold in a matter of hours. I had a realtor lined up, she came to the house on that Monday and I put it on the market at what she suggested based on comps. I drove back home and 3 days later had 2 offers. Seeings that I had never lived in the house or knew anyone in town, I accepted the conventional mortgage buyer, made the offer "as is" and gave a one year home warranty. I closed in a matter of weeks.
I was genuinely surprised how easy it all was, I thought for sure in that teeny tiny town I would have it on the market for years and years and be stuck going back and forth, paying someone to mow in the summer and shovel in the winter.
My parents loved the house and the couple who bought it planed to do some cosmetic things like remove wallpaper and put in new flooring and make it their forever home.
I had a great realtor who was easy going, very accommodating and knew her market. I had it appraised before I listed it and trusted her when she gave me the range in which she said I should list it for based on her knowledge of the market.
I'm so relieved it's all done and I won't have to go there again.
Glad it went easy for you. It is so nice when that happens.
Do FHA and VA loans vary requirements state to state?
We just sold an closed on my Mom's brick house. It has set empty for a year. It needed lots of updating (she owned it since 1960) and had horrible peeling paint on the large detached garage and on the window sills, eaves and facia. We got several offers (too low) the first week on the market, all FHA. Our realtor said FHA tended to be picky on peeling paint (1953 vintage home, so lead based underneath) and stairway hand rails.
We got two good prequal offers ten days in, one FHA, one conventional. We accepted the conventional as we did not want to deal with any additional fix ups/repairs. We found out the house actually appraised (from their bank) for 7 thousand more than the offer. They had a long list of things they wanted fixed inside however. After we found out out what the appraisal was, we were all done negotiating. After a couple minor safety issues were taken care of, and the sewer line cleaned, it closed 8 days ago.
Good to be done!
Conrad- glad yours sold too!
I'm not sure about it varying from state to state. My biggest concern with going with the VA buyer was that IF their inspector found anything to be repaired, I had no idea who to contact to make such repairs. I felt it would have been somewhat of an inconvenience to keep asking my realtor who to call for this or who to call for that.
I honestly didn't think there was anything wrong with the house at all, my dad was a pretty handy kind of a guy, who took extremely good care of his home....but because I'd never lived in that house (parents retirement home) I felt so much more comfortable offering it "as is" and the buyer was also a handy kind of a guy, the realtor knew him from word of mouth. So for me it was the best idea and it worked out great. Having it to sell so far from me was so unbelievably stressful...This message has been edited. Last edited by: just josie,
Our representing realtor actually said that VA loans often had more picky fix up requirements than FHA. Don't know if that is right or not.
We were just thrilled to get it sold fast & easily, and not have to deal with watering and mowing the yard this summer.
I have sworn never to sell property VA or FHA had a very bad experience with a home many years ago that I sold VA.
First of all they depreciated my home way lower below the figure that Bank Of America had provided us. then, I ended up paying about 3 more point and I can't remember the reason, and they took over 100 days to finally deal with our home. We ended up loosing about 20,000 on that sale. It was our fault for not stopping that sale in the beginning when we were encountering those problems. Since then I have sold several homes and my first words to the Realtor don't bother bringing any VA or FHA offers, I will not accept them.
A friend of mine bought their home years ago with a VA loan, and they said the inspection found all kinds of "little" things that had to be fixed by the sellers before they would be clear to close. For them it was wonderful, as this was their first and only house they would ever buy (traveled with overseas duty and lived in military housing for 20 years)
It was the "little" things I worried that the inspection would find that would nickel and dime me to no end.
I guess it depends what end of the real estate offer you are on, which determines what is good and not so good.
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