Addressing Seller Apprehension in Dealing With a VA-Backed Loan

So you’ve been approved for your VA loan and you’ve found the home of your dream.  No money out of your pocket at the closing table and a ridiculously low interest rate.  Things are looking good.   One final step is to make an offer and have the seller accept your offer.  Sounds easy enough—I mean after all, you meet all the requirements for the VA Home Loan Program.  Truth be told, some sellers (and their agents) are apprehensive about accepting an offer from a VA-backed borrower.  A couple of legitimate concerns keep the seller from jumping at your offer and executing a deal.

One of the biggest allures to the VA Home Loan Program for the buyer may be one biggest deterrents for the seller accepting the offer—since the VA does not require a down payment, earnest money deposits on VA home loans are typically lower than conventional ones.  While the VA program does not require a down payment, earnest money can show that a buyer is fully interested in the property and also acts as a deposit toward the total purchase price.  Offering a meaningful earnest money deposit as part of the sales contract will show the seller that you’re serious and could subdue their fears of working through the VA Home Loan Process.

Another big fear for the seller is the appraisal process.  The VA requires pre-approved appraisers to conduct appraisals on homes they are backing.  This process can be intimidating for the seller because it is viewed as a bit more “red tape” they must go through that they wouldn’t have to with a buyer using a conventional loan.  One way to ease this fear is simply to do your homework and find an agent that is experienced in dealing with the VA Home Loan process.  The VA Home Loan Program has a set of standards known as Minimum Property Requirements, or MPR’s.  This meticulous appraisal can highlight property conditions that do not meet the VA’s standards.  Knowing what to look for going into a purchase and speaking with the seller can prepare both parties for the VA appraisal process.  Knowing what to look for and having an open line of communication is key in alleviating the seller’s fears on the appraisal process.

The VA Home Loan Program is a fantastic program that allows those who have served the option to purchase a home with ease.  Knowing how to handle the situation to alleviate concerns on behalf of the seller makes you a better buyer.  It will help educate the seller on the options they have as well as make you seem like a buyer who is serious about making the deal happen.  Of course, in addition to addressing the aforementioned issues up front, a pre-approval for the VA Home Loan Program from United Home Loans is another excellent way to increase your buying power. Contact us below for more info.