Ask the Expert: Finding the Right Realtor for Your VA Mortgage Loan

When you decide to use your VA mortgage loan benefit, there's a lot to think about. We asked Bill Olson, a Charleston-based Realtor with experience working with military families, what our servicemen and women should look for in a Realtor if they plan on using their VA benefits. Here's what he had to say:

I often get asked, “do I need a special Realtor when I use my VA mortgage loan benefit?” The short answer is no. Any Realtor can assist you in purchasing a house using your VA mortgage loan benefit. However, finding the perfect Realtor can be just as important as finding the perfect home. This is especially true when using your VA mortgage loan benefit since they come with unique loan requirements.

How to find a Realtor

Finding a realtor who’s familiar with your VA loan may be easier than you think. The easiest way is to ask your colleagues, especially those who have used their VA loan benefits and get a recommendation. If you are moving to a new area and have no one to give a recommendation, ask your lender if they have preferred Realtors. A few lenders even offer cash back rewards programs available to military and their families, and they can align you with a Realtor well versed in your VA loan benefits.

Ready to buy? Learn how to find the right Realtor

A VA home buyer's needs

The needs of a VA home buyer can be much different than any other buyer, especially when relocating. When you receive a permanent change of station orders, you will only be given 10 days of leave to evaluate your new station and complete a home search. Given that the average loan takes 30-45 days from contract to close, you may not be present for the entire process of inspections and repairs. Having a Realtor that you trust and can communicate every step of the process with you and your family is extremely important. 

Another aspect of being active duty is the possibility of being deployed. If this were to happen during the process of purchasing a home, you need a Realtor you can trust will get the deal closed on time. When interviewing a Realtor, one question you should ask yourself is: can I trust this person with my home and my family if I were to be deployed?

VA home financing requirements

The Department of Veteran Affairs has created home requirements for VA mortgage loans. These requirements are made to ensure the home buyer is making a solid investment. Having a Realtor that is familiar with these requirements will make certain that you are not wasting your time looking at homes which would not qualify for VA financing. For a home to qualify for VA financing, it must meet the Minimum Property Requirements (MPRs). The purpose of MPRs, according to the VA, is to “provide general acceptability criteria for properties which will become the security for VA-guaranteed loans”. These MPRs provide a basis for determining if a property is “safe, structurally sound and sanitary” and “meets the standards considered acceptable in a permanent home in it’s locality”. When appraising a property for a VA-loan, the appraiser may write up certain repairs which need to be addressed by the seller before the VA will guarantee the loan. For example, on a home listed “AS-IS”, the seller will not complete any repairs, thus eliminating the home from VA eligibility.

Writing an offer for a VA mortgage loan purchase

There are certain guidelines that your Realtor should be familiar with when you finally find the perfect eligible home and write your offer. The VA has certain regulations on what you, the borrower, can and cannot pay. One big fee, which is not allowed to be paid by the veteran-borrow, is a broker’s fee or commission. This must be negotiated out of the seller’s proceeds of the sale.

There are also regulations prohibiting excessive seller concessions. According to the VA Pamphlet, section 8.05: Any seller concession or combination of concessions which exceeds 4% of the established reasonable value of the property is considered excessive. Seller concessions include, but are in no way limited to, payment of the buyer’s VA funding fee, prepayment of buyer’s property taxes or insurance or gifts such as a television or refrigerator. Payment of the buyer's closing costs is not included in seller concessions. 

Don’t let all the regulations of a VA mortgage loan frighten you. Having the right Realtor can make the process extremely smooth and stress free. 

Thank you for your service and happy house hunting!

Still have questions? Get the facts about VA loans.  

Bill Olson is a realtor with ERA Wilder Realty in Charleston, SC. He specializes in military, corporate and personal relocation. If you’re thinking of buying or selling a home in the Charleston, SC area, contact Bill for all your real estate needs. You can find Bill on Facebook, Twitter, and LinkedIn.