The real estate housing market may be cooling some, which is good news for veterans and military service members looking to buy a home. Still, challenges remain for home buyers with qualified mortgage loans backed by the department of veterans affairs (VA). The competition between buyers with conventional loans and buyers with VA loans has been even more prominent in this real estate market.

If you are wondering, “How do I win an offer on a VA loan?” read on to understand why sellers are wary of VA loans and for advice on presenting a strong offer.

Why are Sellers Wary of VA Loans?

Some people have an incorrect understanding of VA loans and what they entail. This is common due to outdated facts and misinformation among average home sellers and seller agents. Some of the most common are:

Sellers Assume There is More Risk of Not Closing

The thought that an offer made by a buyer using a VA home loan to purchase will involve more risk can be rooted in a misunderstanding of the guidelines and procedures involved with this type of loan. There can also be the assumption that the buyer is not serious because a down payment is not required. We include insight into how to combat this assumption under step number five of our seven simple steps to get a VA loan offer accepted.

Sellers Assume That it Will Take Much Longer to Close

Many sellers believe that offers made with a VA loan close after a more extended period than those with conventional loans. However, VA mortgage lenders can shorten the close of the escrow period. It is possible to close in as little as 21 days-sometimes even less. This makes working with an experienced VA home loan specialist crucial for your offer to be accepted.

Sellers Assume Buyers Have Less Cash on Hand

This assumption leads the seller to believe it will be more costly for them to close. They may believe buyers who make VA loan offers have less cash because a down payment is not required, and many ask the sellers to pay their closing costs. We will address this assumption and how to combat it in our seven simple steps to get a VA loan offer accepted.

Sellers Assume VA Appraisers Will Undervalue the Home

Despite this assumption, the appraisal process for a VA Loan is no different from that of a conventional loan. The VA contracts a private appraisal company to ensure the home is safe and to appraise the value.

If a VA-approved appraiser values the home for less than the offer price, the lender will not approve the loan for the full offer price. The buyer will only get a loan for what the home appraises. Therefore, the seller has to lower the price, or the buyer has to have the cash to pay the difference. Creating a solid offer can help ease wary sellers concerned about the appraisal of their homes.

Here is how to address these preconceptions and get your VA loan offer accepted!

7 Simple Steps to get a VA Loan Offer Accepted

The dream of home ownership is both exciting and daunting. It involves gaining new knowledge and confidence. Having an experienced VA loan specialist as your trusted advisor is essential to help you achieve this dream.

Obtaining the acceptance of the offer is just one part of the entire home-buying process. This process includes:

  • Completing the Loan Application: The debt-to-income ratio and credit scores are reviewed to determine the approval amount.
  • Securing the best interest rate and loan terms.
  • Obtaining the Certificate of Eligibility (COE).
  • Shopping for the house with a qualified VA real estate agent.
  • Creating a VA Loan offer.
  • Appraisal of the house.
  • Home inspection negotiations.
  • Closing and moving.

To create an offer that a seller will accept, start by selecting a real estate agent and home loan lender who will respond promptly to requests. This team of specialists will be crucial in working with sellers and sellers’ agents. Once you have started these first few steps, continue through the rest of the list below. If you complete all seven steps, you will be well on your way to getting your VA loan offer accepted.

1. Work with a VA Home Loan Specialist

Be sure to work with a lender who specializes in VA home loans. Having a mortgage lender familiar with VA loans is a great advantage as they are crucial in simplifying applying for a VA home loan and getting an offer approved. This is because they understand the different guidelines that come with this type of loan and are equipped to handle any questions or concerns sellers may have about offers attached to a VA loan.

In addition to your real estate agent’s communication with the seller’s agent, your VA Loan specialist should follow up with the seller’s agent to further communicate your eligibility and the VA Loan progression.

Because VA loans are structured differently, working with a VA home loan specialist will allow for a smooth process and enable veterans to have their offers on their dream homes accepted by the sellers.

2. Work with a Real Estate Agent Familiar with VA Loans

Your real estate agent should know the VA’s minimum property requirements for the home condition for the loan to be approved. To prevent any issues in the closing approval process, discuss these requirements with your agent to ensure the home you are looking to buy will meet the guidelines.

The agent will be crucial in communicating your eligibility and removing any common incorrect notions sellers have about VA loans. Having a real estate agent and a home loan lender who are familiar with VA loans is a great advantage.

3. Use Your Available Cash – Give Extra Earnest Money

Use any available cash to present a more substantial offer. You can give extra earnest money. Doing so will show you are a serious home buyer and provide the seller greater confidence to accept your offer.

4. Pay Your Own Closing Cost

Consider paying your closing costs even though you can request the seller to cover these costs. This, too, will position your offer as a better option for the seller.

5. Make a Down Payment on Your Loan

Make a down payment on your loan. Doing so can provide additional benefits to you, such as lowering your loan fees.

6. Request Your VA Lender to Close in Shorter Time

Extend to the seller that you will request that the VA lender shorten the close of the escrow period, which is often a huge advantage for sellers. As mentioned above, in some cases this period can be shortened to 21 days or less.

7. Include a Cover Letter with Your Offer

Writing a cover letter to the seller to communicate what you like about the house and how you see your family in the home allows the seller to make a personal connection. Include a family picture to position your offer in a unique way and give you a greater advantage.

The VA Home Loan Specialist Who Can Help You Get Your VA Home Offer Approved

Are you ready to win an offer with a VA loan in the current home real estate market? Partner with a trusted VA Home Loan Specialist.

We desire to help veterans and military service members achieve the dream of home ownership by helping you get your loan and get your offer accepted. Call us at 602-908-5849 to get your questions answered and get started with your loan application today!