How to Make a Competitive Offer on a House With a VA Loan

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VA loans give veterans a chance at homeownership–but there’s a lot of confusion and a bit of complexity around VA loans that often make home sellers and seller’s agents wary of accepting them. In light of Veteran’s Day this Friday, we wanted to debunk some of the myths around VA loans, and also share some tips for veterans on how to make a competitive offer on a house using a VA loan.

There are actually quite a few advantages to accepting a VA loan as a home seller, including:

  • VA loans often require less paperwork
  • They are backed by a government guarantee
  • They have the same closing time frame as any other traditional loan
  • There is often no down payment required
  • The have relaxed credit requirements
  • Flexible DTI (debt-to-income) ratios

Here are 8 things veterans can do to make their VA loan offers more competitive and more likely to be chosen by a seller:

  1. Always include a pre-approval letter with your purchase offer. This shows the seller that you have good credit and won’t have any trouble getting a loan.
  2. Write a letter to the seller explaining why you want to live in their house. If this is your first chance at homeownership and you’re getting ready to start a family, tell the seller! If you just love the property and can envision yourself living there and taking wonderful care of it, tell them that. This is your chance to win the sellers over by letting them learn a little bit more about you.
  3. Consider offering a larger amount of earnest money. Offering more than the typical 1 percent of the sales price in earnest money is often accepted as part of the VA loan process and shows that you’re a serious buyer and will not cancel for any contingency other than the house can’t pass inspection or that you, the buyer, can’t qualify for financing. If you do cancel, this earnest money will likely be forfeited to the seller.
  4. Waive certain contingencies that will make your offer more appealing. I wouldn’t recommend waiving the appraisal, inspection or financing contingencies, but talk to your agent about which ones are fine to waive.
  5. Make sure the home you put in an offer on is move-in ready and satisfies the VA’s Minimum Property Requirements (MPRs).
  6. Search for homes that are in good condition. You can utilize this guideline to better understand VA appraisal guidelines.
  7. Ask for a disclosure statement, which will document any known defects to the home. This will provide you some protection from things like termites, renovations made without permits, appliance malfunctions, etc.
  8. Work with a VA lender. You can find one by visiting www.benefit.va.gov.

If you’re a veteran and want to talk to an agent about using a VA loan, please reach out below. We would be happy to answer questions and help you start your homebuying journey!

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