Adventures with VA

I'd like to share my latest real estate adventure with you as the information I've learned may be helpful to someone in a similar situation...

I've been working with buyers who had been pre-approved for a VA loan prior to our first home tour.  Yay for that!  They found a short sale single family home they felt they would be happy with.  We wrote up an offer on the property and submitted for seller consideration.  Seemed easy enough until we heard back from the short sale negotiator.  They sent my clients a proposed offer on what they felt would be acceptable by the seller's lien holder...this is done with the hope of saving time and keeping the contract clean and legible prior to submitting to said lien holder.  It appears that for this particular home, the lien holder was not willing to accept a less than asking price even though there was some wood rot on the exterior siding, exposed electrical wiring, no appliances, and a couple other minor defects my buyers were willing to inheret.  Important note: VA requires a functional cooking appliance in the home prior to closing.  Please ask your lender to verify what the exact requirement is. 

As their broker, I didn't like some of the requirements the negotiator included in the proposed contract: 1) buyer would not be able to withdraw their offer prior to lien holder approval which could take up to 120 days 2) buyer asked to pay 1.5% of purchase price at closing for negotiator fee 3) no closing date or offer expiration date noted on the contract.  I prefer to have more control in protecting my clients during each transaction, and these terms were making that pretty difficult.  Because my buyer's timeline is somewhat sensitive, they recognized that a short sale transaction was not something that would work for them. 

We continued touring homes and came across a manufactured home they liked enough to consider writing an offer.  Prior to doing so, we had several questions for their mortgage representative to identify any potential disasters that would prevent my clients from being able to close on a VA loan for manufactured homes.  Their initial mortgage rep was non-responsive and inexperienced with these type of loans. 

Fortunately, my in-house mortgage rep is well-versed in VA lending and was able to meet with my buyers right away to get them back on track. It's good to know that VA requires a termite inspection report in addition to a home inspection...this could have been an uncomfortable situation for me as their real estate broker and for my clients if they weren't financially prepared for this added expense.  VA also requires that the manufactured home is permanently affixed to the foundation and has never been moved.  The buyer's lender would order an engineer certification for this like they would order an appraisal.  Both engineer certification and appraisal are paid for upfront at the time of service by buyer.

Another thing to know about VA loans is that although they are 100% financed, buyers should have and anticipate paying approximately 4% of purchase price for closing costs.  I may have more to add on this as we get closer to the closing date.  For now, I'd like to know what your thoughts are on this information.  Did you find it helpful or interesting?

Your feedback is valuable to me and much appreciated.