Why don't sellers like VA offers?
By Kyle Melvin · NMLS #1486450 · REV Mortgage ·
Short answer
Mostly because of things that used to be true or were never true: that sellers must pay the buyer's closing costs, that the VA appraisal is a deal-killer, and that VA loans close slowly. None of those holds up. What is real is that the VA appraisal includes a property condition check and that an appraisal below the contract price lets the buyer walk under the escape clause — both of which are manageable. A well-written VA offer, from a lender who closes them regularly, competes on equal terms.
Every objection a listing agent has to VA financing traces to a rule that has changed, a rule that never existed, or a lender that did not know the process. Taken one at a time:
"The seller has to pay the buyer's closing costs." False. VA caps what the buyer can be charged — the 1% lender fee and the non-allowables — and caps seller concessions at 4%, but nothing requires the seller to pay anything. The closing costs answer walks through it.
"The VA appraisal will kill the deal." The appraisal checks the Minimum Property Requirements — safety, soundness, sanitation — and most homes meet them. A repair condition is a negotiation, not a rejection, and the same condition would follow the house to the next VA buyer. If the value comes in low, the Tidewater process gives the listing agent a chance to submit comps before the number is final, and gives the listing agent a chance to submit comps before the appraisal is delivered. Conventional and FHA now have their own reconsideration-of-value processes, but those run after the number is already on paper; VA is the only one that asks first.
"VA loans take forever." A VA loan closes on the same timeline as any loan when the COE is pulled at pre-approval and the appraisal is ordered on ratification. And a TBD underwrite lets a VA buyer offer a shorter financing contingency, which answers this objection before it is raised. The closing timeline answer covers where the days actually go.
"The buyer has no skin in the game." VA buyers have earnest money at risk like anyone else, and the residual-income test in the VA loan guidelines.
What is genuinely true: the escape clause lets the buyer cancel if the home does not appraise, and the property has to pass the MPRs. A seller with a well-maintained, fairly priced house has nothing to fear from either. The myths page is written for the listing side of the table.
Questions people also ask
- Can a seller refuse a VA offer?
- A seller can accept any offer they choose, but a listing agent who blanket-rejects VA financing is leaving out a large, well-qualified buyer pool, and in some jurisdictions steering against a financing type raises fair-housing questions when it correlates with protected status.
- How do I make my VA offer stronger?
- Pre-underwrite before you write, offer to pay your own allowable closing costs, keep the inspection period tight, use a lender with a VA track record, and have your agent explain the appraisal process to the listing side up front.
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