VA Loans in a Sellers Market – The Challenges

VA Loan Benefits

Being a veteran who has used his VA Loan benefits in the past, I have found the program to be a very worth while option for myself and my family.  I personally never used a VA Loan during a sellers market though.  Anytime I used one, it was either a neutral market or a buyers market.  Fast forward to 2012 – many parts of the country are in a true sellers market.  In Arizona for example, some homes that are priced well are receiving over 30 offers, and most homes are receiving multiple offers.  Here is where the challenge lies for a VA Home Buyer.

VA Loan Benefits

When a seller is evaluating multiple offers for the sale of their home, they are going to choose an offer that has a price that will satisfy them, and have the greatest likelihood of closing.  There are lots of other criteria, but these are two of the biggies…  When using VA Loan Benefits, a VA Loan home buyer typically will ask for some amount of closing costs, and this is where the challenge lies for the buyer.  When multiple offers are submitted on a property, there is a good chance some of them will be cash investors, some will be cash buyers for their own residence, some will be conventional, some FHA, etc…  It is sad to say, but the veteran home buyer is at a disadvantage.  Even if they offer full price, they are probably asking for closing cost assistance.  As well, even if they really want the home, and offer way above full price, the home must still appraise…  A seller knows this, and knows there may be an appraisal issue, so no matter how much a seller may wish to support the military veteran, and accept their offer, they would be doing so at either a large financial loss, or at the risk the home may not appraise.  It seems the veteran is at a significant disadvantage.

VA Loan Benefits

It is my hope and intent that we can do something about this.  The concept for The Military Veterans Association of Real Estate Professionals was created before this current real estate market, but the intent was always the same. We would be a group of people, real estate professionals, lenders and just about anyone who would share the common objective of helping military veterans achieve the dream of home ownership.  Times are tough right now, but it is our hope that collectively we can develop not only awareness, but also develop programs to assist those who have served our country in the past and deserve a program and opportunity to provide a home that they own for themselves and their families.

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Let’s hope that when a veteran decides to use his hard earned VA Loan Benefits, that the market supports and rewards such a decision and the veteran is not penalized for doing so!!!

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