Start with a strong preapproval

The best VA offers start long before the first showing. Ask your buyer to talk with a loan officer early. A good preapproval is based on a real look at the buyer’s pay stubs, bank statements, and credit. It is more than a quick guess.

Your buyer will also need a Certificate of Eligibility, or COE. This paper from VA shows they can use the benefit. A loan officer can often pull it online in a few minutes. Get it done up front. That way, no one is waiting on it after the contract is signed.

When you send the offer, add a short note from the loan officer. It should say the file has been reviewed and the COE is in hand. Then make the rest of the offer clean: fair earnest money, a short inspection window, and a flexible closing date when you can.

Know the myths you may hear

  • “VA appraisals make the seller fix everything.” Not true. VA has a list of basic standards for the home. It must be safe, sound, and clean enough to live in. VA tells its appraisers not to ask for cosmetic fixes, like worn carpet or old paint.
  • “The appraisal is the same as a home inspection.” It is not. The appraiser looks for clear problems, but does not test the furnace or the dishwasher. Your buyer should still get a home inspection.
  • “The seller has to pay all of the buyer’s closing costs.” Also not true. A seller may choose to help, but that is part of the deal you work out.

Explain the VA escape clause the right way

Every VA contract must include a special VA clause. It is often called the escape clause. It says that if VA values the home for less than the contract price, the buyer can walk away and keep their earnest money. The buyer can also choose to go ahead anyway.

Some sellers worry when they see it. But the clause only applies to a low VA value. It is not a way out for any other reason. And the buyer still has three choices when the value is low. They can ask the seller to drop the price, pay the gap with their own cash, or walk away. If your buyer has extra cash and is willing to cover a small gap, say so in the offer. That can make a big difference.

Help the appraiser before a low value happens

VA has a helpful step that many agents do not know about. Before the appraiser finishes the report, they must reach out if the value looks like it will come in below the price. The lender, or a contact the lender picks, then has two business days to send more home sales for the appraiser to think about.

Ask the loan officer to list you as that contact. Then be ready. Keep a short list of recent nearby sales that support the price. For each one, have the address, sale price, sale date, and size. In Franklin or Brentwood, where homes can differ a lot from street to street, good sales data can save a deal. If the value still comes in low, the buyer can ask VA to take a second look after the report is done.

Talk about seller help with care

VA allows the seller to help with some of the buyer’s costs. There is a cap on certain kinds of seller help, called concessions. Paying normal closing costs does not count toward that cap. Ask the loan officer how much room there is for your buyer before you write the offer.

Most VA buyers also pay a one-time VA funding fee. It can be added to the loan, so it does not have to be paid in cash at closing. Some buyers, such as many who get VA disability pay, do not pay it at all. Knowing this up front helps you plan how much seller help to ask for.

Questions to ask your VA buyer

  • Have you used your VA benefit before? Do you still own that home?
  • Do you get VA disability pay?
  • How much cash do you have for closing costs or a small gap?
  • Is anyone else going to be on the loan with you?

These answers help the loan officer plan the loan and show you how much room you have to negotiate.

How a broker can help

VA sets the main rules, but each lender can add its own on top. A broker can compare more than one option and match your buyer with one that fits the deal.

Common questions

Does a VA appraisal require more repairs than other loans?

Usually not much more. VA wants the home to be safe, sound, and clean enough to live in. Its appraisers are told not to ask for cosmetic fixes or normal wear and tear.

Can a VA buyer lose their earnest money if the appraisal is low?

No. The VA escape clause lets the buyer walk away and keep their earnest money if VA values the home for less than the contract price. It only applies to a low VA value.

What can agents do if a VA appraisal looks low?

The appraiser must reach out before finishing if the value looks low. The lender or a chosen contact then has two business days to send more sales. After the report, the buyer can ask VA for a second look.

Writing an offer for a VA buyer?

Reach out through our contact page and we will connect you with a Heathrow Mortgage loan originator. You can also start an application online.

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