Ask a REALTOR®️!!
Long-time friend and Rook Buddy (the two are NOT mutually inclusive) Rex Abshire from San Diego asks:
Does the $0 Down VA Home Loan offer look less appealing to a seller than a traditional buyer with a down payment?
Great question, Rex, and one that I hear often from fellow Veterans. As with most real estate transactions, the answer is…it depends. According to the Fair Housing Act, it is illegal to discriminate on the basis of Veteran status, so obviously, there’s no discrimination. But preference in a business offer isn’t discrimination.
To a Seller, the amount of down payment is immaterial. Only the bank lending you the money would be interested in the amount of a down payment. The hitch comes in the amount of time it takes to close a house. For an all-cash buyer, a house closing can take as little as two weeks, whereas a VA loan closing will typically take 30-45 days. Certainly, any prudent Real Estate Agent would advise their clients to take an offer with a quicker closing date. So, what’s a Veteran to do?
One thing Veterans using the VA loan have at their disposal is cash! Or at least no cash tied up in the down payment. A traditional buyer will have to contribute 20% of the down payment right up front. That will leave very little liquid cash in their bank account, so they might have to ask for concessions. Write a letter to the Seller and tell them you’re willing to take less concessions in the deal because your VA loan empowers you to do that. A handwritten letter in this regard will do wonders. Tell them you’re not going to ask them to pay any closing costs. Make a $1500 earnest money payment with the offer instead of the traditional $500 to show you are serious. Even something as simple as not making the Seller shampoo the carpets. It’s $250 out of your pocket, but it’s often the little things that can seal the deal.
And it’s not for nothin that you’re a Veteran. Don’t make a big deal of it in your letter (grinds my gears, personally when I see Over-Veteraning), but mention it. It matters to 95% of Sellers in this world, and especially if you’re in the Brazos Valley, or San Diego.
I hope this answers your question, Rex!
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