VA Home Loans Deserve Careful Consideration
Americans around the world stopped for at least a moment this week, some maybe much longer, to reflect on the events of September 11, 2001. We live in a different world today because of the terrorist attacks on the World Trade Center towers, the Pentagon, and United 93. More than 3,000 lives were lost that day, and since then, many more have been lost fighting for our freedom. One of the greatest honors I have as a Realtor is to represent Veterans purchasing a home using the Veterans Administration – VA home loan program. As small gesture of gratitude for all those who have served our country in any capacity that qualifies them for a VA home loan, I present you with the things you need to know as a home seller evaluating an offer which depends on VA financing.
Most VA home loans are for 100% of the maximum purchase price allowed, which is currently $625,500 for homes in Orange County, CA. The veteran is not required to make a down payment, but can make a down payment sufficient to bring the loan amount down to the $625,500 conforming limit. In the instance where the purchase price is at or below the limit, stacked up against a buyer making an offer using a conventional loan, putting 20% of the purchase price down, some sellers would see the buyer depending on a VA home loan to be financially weaker, as they are not putting any of their own money into the purchase and certainly not giving you any proof of their liquid assets or their net worth. If you find yourself in the enviable position to evaluate two offers which net you a similar amount, one from a buyer putting 20% down and the other from a Veteran putting nothing down, you may want to add a more subjective line of scrutiny to your decision making process.
According to the current VA home loan guidelines, VA borrowers are not allowed to pay for their escrow fees. So you may receive an offer from a VA home loan buyer asking for you to pay their escrow fees. You may say “Great – happy to!” Or you may say “not my responsibility.” Either way, work with your agent to look at other ways of handling the escrow fees for the Veteran.
In addition, the VA home loan guidelines preclude the Veteran from paying for the termite inspection or the termite repairs. The good news here is that any other buyer, using conventional financing or paying cash, will ask you (the seller) to pay for the termite report and the repairs necessary for a clear termite report. Awesome! No disadvantage to the Veteran there.
If you do receive an offer to buy your house from a buyer using a VA loan, give it careful consideration. How good will you feel knowing that the tipping point for the offer you accept is not to put more money in your wallet, but to pass your house on to a Veteran. Terms like “paying it forward,” “putting out good karma,” and “supporting our troops” come to mind.
I’m Leslie Eskildsen, Realtor
Feel free to call or text me – 949-678-3373
Or email me – Leslie@LeslieEskildsen.com