Some sellers steer clear of VA financing because they are not educated by their real estate agent on the process. VA loans are only eligible to people who have served for our country and allowed a streamlined loan to help them gain home ownership. Here are a few points to keep in mind, so all parties of the transaction have a clear understanding and a smooth transaction like the one I just closed last week.
- Close of escrow is 45 days to allow the VA guaranty. Please plan accordingly, especially if the property is a short sale. The lender will specify the exact close of escrow date, so it is important that the buyer’s agent correctly identifies the close of escrow timeline.
- Seller pays closing cost. Depending on the property a buyer is looking to purchase, they are able to use this as an advantage to get a property at a better value. Using a Realtor who can negotiate on your behalf will save you tons of money.
- Buyer cannot pay for the mandatory pest inspection. Right up front, the party who is paying the pest inspection should be identified and negotiated in the contract to avoid delays.
- Section One and sometimes Section Two Clearance is needed for the VA guaranty. Once again, the VA buyer needs to know a party will have to pay for the work to be completed.
- Make sure the VA applicant has all the paperwork complete as thoroughly as possible. The buyer’s agent is working closely with his or her lender to make sure they are following the contract timeline and able to remove contingencies. Prior to completing mandatory repairs on the property, the buyer should feel comfortable that they will get the financing.
- No refunds on inspections, repairs, appraisals, and a few others if the transaction falls through. No one likes to invest in a property and have it fall through, but sometimes it is better to cut loses sooner rather than later.
- Not always 100% financing. Although the VA loan is 100% financing, the buyer may have to come up with some closing costs for insurance, title protection, escrow fees, inspections other than the pest/termite, appraisals, etc.
- The buyer will have to pay for an appraiser and any re-inspection fees. A typical appraisal is about $500, so make sure all smoke detectors, carbon monoxide, and electrical plates are properly installed, as well as the water heater is braced.
- Anything can happen until the property closes escrow. I am not trying to scare a buyer, but I rather inform them of the complications that may arise and find solutions. It is best to have the keys to the house prior to buying a washer and dryer.
- Strongest than your weakest link. The buyer’s agent, listing agent, buyer, seller, lender for mortgage financing, lender for the short sale approval, asset manager if it is a bank owned, escrow and title officer, appraiser, and inspectors all have vital roles in a transactions. Being aware of all job duties, I can direct questions for the smoothest transaction.
Are you interested in a VA backed loan to start the home buying process? Talk to real estate agent Kristen Jurevich for VA loan questions and get a lender on your team to start the process. You have done so much for our country, and I have a duty to protect a Veteran’s best interest in a real estate transaction.