VA? No way. Listing agents and sellers should be ashamed

I am a veteran and we had our offer declined once. The response communicated to me from my agent was "We said highest and best, so why did you choose a VA loan?" I had no idea that would have been a determining factor. It is a shame.

What a shame - I was unaware of this, but perhaps the listing agents need to be better informed about these processes. Very informative post.

Could not agree more that Veterans should be on a level playing field with other Buyers.  Would be interested in hearing of your proposals for solutions.  Do you lay the blame at the feet of the Seller or inexperienced, uninformed (or lazy?) agents?  Pertinent topic for discussion in today's market with the influx of Veterans wanting to use the benefits they rightfully deserve.  Thanks for sharing!

And for the most part the idea that the VA loan is worse than a conventional loan is poppycock.  I never suggest to a seller that they should turn down a VA loan based on the idea that the appraisal will be an issue.  The only time it may lose out is if it truely isn't the best offer presented.

Kudos to you for writing such a great post. I get the same kind of nonsense with FHA.

John, I had never really looked at it this way before but you make a very good point. If this ever comes up with a seller, I will be sure to remind him of the sacrafice these vets have made for us.

John, Thanks for Standing up for the rights of our Veterans, who deserve all the benefits they have earned defending and fighting for our Freedoms and Way of Life in this country. I too am ashamed that I have seen this practice done of passing up a VA loan for the same reasons you pointed out in your post. However, I have helped many Veterans get a home using the VA loan. Sellers do need to be more educated on the VA process.

Well over half of the local loans are VA because we surround (several small towns) an active Army Post. If Sellers passed on VA loans here, they'd probably be waiting a loooooong time!

Oh yeah, as a Veteran, I appreciate your post!

John you are so right - unfortunately, on Hilton Head Island, because of the factor of having gated communities, the actual community isn't allowed by VA. Having said that we do see VA loans in Bluffton and absolutely in Beaufort due to the proximity to Paris Island, MCAS, etc. I haven't had any sellers squirm and when they ask whether it will be difficult to be approved by VA apparaisers, I say that it will inure to their benefit anyway! I hate that you even have had this be an issue.

You make a lot of great points.. One of my pet peeves with the VA is the requirement that the VA buyer cannot pay any portion of the buyer agent fee.  FHA dropped this years ago.  So some agent will not work with a VA buyer and they end up going to the listing agent and have no representation at all!  In my neck of the woods agents don't split the fee 50/50 and some are entry only with no compensation or little compensation offered.

I live in Huntsville Alabama area and about 30% or more of my sales are VA.    This is on new construction so we are willing to make the product meet the requirements of VA - this usually means providing a 2/10 warranty.    We have found the VA buyers to be some of the best we deal with and we do appreciate their service to the country.

Nice post, and well said.  ALthough I live in an area that is generally too high priced outside the limits of a VA loan, during the downturn I did a few while prices were depressed.  They were all grateful to get into a home, and personally I think the VA loan is one of the greatest benefits they get.  Part of the GI Bill, which is proof government can and should work for people.

We don't see too many VA loans in Silicon Valley. I agree it is sad that the same people that dodged bullets have a difficult time buying a home.

I haven't seen a lot of this, and I know loan officers and sellers who have no problem with VA loans. Appraisers can be a problem with any type of loan. You can bet it's the real estae agents that cause most of the problems because of their lack of knowledge with VA loans.

THANK YOU for writing this!  You have put my frustration into eloquently written words.  I may just include this post with my next VA offer:)

John- I'm late coming to this but i had to thank you for writing this post.  How can we say we support them out of one side of our mouths then not go to bat for them if they plan to buy via a VA load.  Good job!

I already commented once, but I have to add real-world experience that I had with a VA buyer and a very difficult VA appraisal. Sometimes the VA appraisers will be inflexible, and they can also prevent a sale if they've got anything out of the ordinary. This is another reason why sellers might prefer conventional loans over VA.The house was a FSBO, so the seller did not have an agent. There was an apartment that was connected to the main house by a breezeway. The buyer had visited the office to pay the VA appraiser but the appraiser's office would not take the payment ahead of time. This caused some friction between the appraiser and the buyer. Additionally, the appraiser informed me at 4:30pm the previous afternoon that he would be performing the appraisal at 9am the next morning. I could not be there because the buyers that I was meeting at 10am were part of our company's relo program and unsympathetic. Since the appraiser would also not reschedule, I told the appraiser that the seller would be there and that I would provide him comps later that day. The property was so unique there were no comps within 3 miles. This fact for some reason caused the VA appraiser to write in his narrative that "the buyer agent failed to provide comparables". The VA appraiser also discovered that there were two separate septic and electrical systems on the property, and while he gave a value for the sales price he wrote the narrative in such a way that the underwriter would not accept it and my clients were turned down for the loan. I tried to reason with him and ask him to provide an addendum stating that the apartment was indeed attached to the main house, but he refused. I shopped the property to seven, yes SEVEN different lenders because my clients wanted this property so badly. I finally got the 7th one to accept them, but when they did the final credit pull, my buyer's credit score had dropped 5 pts below the required limit and once again, they could not buy the home. One of the lenders told me that they would be surprised if the property could be purchased with a government loan at all. It ended up with both the buyer and the seller insisting that I and their original lender intentionally did them both wrong. It was a bizarre situation, but I've never heard of a situation like that with a conventional loan.