There’s an old sales adage that states, “The confused mind says ‘no’”. Nothing could be truer when it comes to VA home loans. This has been truly one of the most disappointing things about this two-year run we have had in the market. VA loans seem to be thrown aside as substandard or “risky”. As background, VA loans are guaranteed by the government and enable veterans to buy homes with no or low down payments, so why does it seem that some sellers won’t even consider offers with VA home loans?
First off, there is a misconception that because this is a zero-down mortgage, the veteran might be less likely to make it to close. But on the contrary, this is simply the way these loans are structured to make buying a home easier for our vets. To boot, there is a huge apparatus in the background at Veteran Affairs which offer support to the civilian population trying to get these homes to settlement. So why does it seem that some sellers won’t even consider offers with VA home loans?
A second misconception is the home must be in pristine condition. Yes, VA appraisers do impose minimum property requirements (MPRs) that require the home to meet guidelines for safety and livability. However, contrary to popular beliefs, the requirements are usually very fixable. Most common are handrails, GFCI outlets near water sources, and smoke/CO2 detectors.
It’s also not just sellers that seem to discriminate against VA loans, but also some realtors. The reason for this can be boiled down to the fact that some realtors just simply do not understand VA loans. They often wrongly assume that deals with VA loan buyers are riskier, cost more, and are more challenging to close than other types of loans. This lack of understanding translates to the sellers often passing on these offers. (again, confused mind says no) My team and I do work with vets and I always give their offers a strong second look if they’re not the best. My partner and I just accepted one on one of our listings and it felt REALLY good. It’s the least we can do for these brave men and women.
For any veterans out there, take heart as my team is “VA Certified” by our lenders to handle your transaction which means we all have taken courses to better understand the ins and outs. We also go the extra mile to ensure the listing agents (and their sellers) fully understand the way these loans work. It is inevitable that in the near future veterans will see a resurgence in their acceptance rate as sellers lose leverage and stop receiving multiple offers for their property. I personally look forward to the day when placing a vet becomes MUCH easier.