There’s multiple offers in. Yours is a VA.
The listing side isn’t giving any hints, but you can already feel it slipping away. Again. Should you offer more? Remove all your contingencies? Make a deal with the devil? What’s it going to take to get them to choose your VA offer?
Here’s how you can finish in 1st place this time, and get your house!
Reality check - VA isn’t a seller’s first choice
We wish it wasn’t true, but a VA buyer does come with extra requirements. In a seller’s mind, that means there’s more potential for the deal to fall apart or cost them more money.
- VA Non-Allowed Fees – VA says a buyer can only pay certain fees. Yes, there are several fees common to a purchase that a VA buyer will be charged, that they can’t pay by VA rule. The incorrect assumption is those fees automatically become the sellers, lowering how much they’ll make
- Property Condition – VA has Minimum Property Requirements (MPRs). If there are issues, those items have to be fixed, prior to close.
- Termite Clearance – VA requires a termite clearance in parts of the country that have those.
It’s really the listing agent that’s the problem.
The above list isn’t the problem.
How the listing agent - who very often isn’t familiar or comfortable with VA – presents the offer, that’s the real problem.
Rather than learning the real details of VA deals, they just make it out to be the Boogey man of loans. It’s a government program. Do you really want your sale to be like working with the DMV? If the agent you hired to sell your house told you that, would you take a VA offer over another buyer?
Solution: Your offer has to address any concerns -Directly
Don’t leave it to the listing agent to spin your offer as anything other than the best option. You have to address, in language the seller can understand, the following:
#1: Request ZERO Seller Credit:
If at all possible, ask for ZERO seller credit. The VA non-allowed fees can be covered by your agent (rare) or lender (completely normal) instead of the seller.
#2: Show money
There’s a perception that VA buyers go with a 0% down payment because they don’t have any other money. What if there are repairs or anything else that pops up. Are you going to be able to afford it?
Include a bank statement to show you have funds to deal with issues. Buyers with down payments are presumed to have more money than is needed. You have to prove that’s the case for you as well.
Showing funds doesn’t say you will just roll over if issues come up. It just proves you have the means if needed.
#3: Address Property Condition upfront:
If there appears to be any appraisal issues and you are willing to pay for the work, put that into the contract upfront. Yes, it makes you obligated, but it’s likely you’d be paying for it even if the VA didn’t require it anyway.
#4: Your agent and lender’s reputations count:
If your agent is a ferocious pit-bull, fighting for you at every turn, then it’s likely the listing agent has been bite before and doesn’t want to play again.
If your pre-approval letter is from a lender with a 3 star reputation, then you’re trying to win the race with a weight tied to your neck.
#5: Promise to close quickly
VA deals have a reputation for taking longer than normal deals. The seller doesn’t want to make another mortgage payment, let alone 2. Help them know you’ll close in under 30 days, just like any other offer.
#6: Personal letters are your secret weapon.
The seller loved their home, it’s practically part of their family, but it’s time to move on. They want to see their home go to someone they like. You’ve sacrificed, your family has sacrificed, you’re good people. It’s time to tap into that emotional energy.
Summary for writing the superstar offer
Again, the key is to have the offer stand on its own. If the listing agent starts to steer, empower the seller to push back. That includes:
- VA buyer requests ZERO seller credit. Buyer’s lender to cover VA non-allowed fees
- VA buyer will pay for any VA required appraisal repairs and cover the costs of any termite clearance
- VA buyer has funds, see attached
- Buyer’s lender will close in 30 days and has a 5 star reputation, see attached
- We love your house. Please see our attached letter about why.
If your offer is about the same price as the others, you’ve addressed any concerns that might make the VA a worse deal for the seller, your team helping you has a great reputation, and you have a great personal letter, then you’re set up to win.
If you’re missing one element, then be ready for second place – and more home shopping.
Can’t I just offer more, and win that way?
Why? Do you like paying more than you have to?
Oh… and it probably still won’t be accepted anyway. Offering more than the property is worth is just a recipe for the appraisal coming in low. The listing agent will advise their seller to avoid that dead end and just take the highest realistic purchase (even if that’s a lower purchase price than your offer). You still lose.
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Information accurate as of publication date; the views, articles, postings and other information listed in this section are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation. The material in this section is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.Thu, 2016-03-10 15:46