Homebuyers

How VA Loan Buyers Can Be Competitive in Today’s Housing Market

Buying a home in today’s competitive real estate market can feel like a high-stakes game. And for those using a U.S. Department of Veterans Affairs (VA) loan to purchase a home, the deck can sometimes seem stacked against them.

With no down payment required and stricter appraisal and inspection standards, VA loans are often misunderstood by home sellers. That means VA buyers may be passed over in bidding wars.

“VA loan buyers bring a tremendous amount of value and reliability to the table, yet unfortunately, misconceptions persist that can make their offers appear less competitive,” said Kate Monroe. She is a Marines veteran and CEO of VetComm US, which helps veterans file disability paperwork. “In reality, VA buyers are often among the most committed and prepared clients I work with.”

With the right strategy, VA buyers can be just as competitive as anyone else, even in a bidding war.

Misconceptions about VA loans

VA loans, backed by the U.S. Department of Veterans Affairs, allow qualified buyers to purchase a home without having to make a down payment or pay mortgage insurance. Borrowers can also generally lock in lower mortgage interest rates.

These loans are available to military service members, veterans, and military spouses under certain circumstances.

Many sellers worry about VA-required inspections and appraisals that may require them to make repairs. But those rules are there to protect the buyer, not to make things more difficult for the seller.

“The VA has these mechanisms in place to protect the veteran,” said Anthony Ramirez, a New American Funding loan consultant based in San Diego, Calif. “They don't believe that a veteran should overpay for a property.”

How VA homebuyers can strengthen their offers

Despite the myths, there are ways that VA buyers can stand out in a competitive housing market.

1. Get pre-approved for a mortgage

When bidding on a home that’s likely to receive multiple offers, it’s important to have a mortgage pre-approval letter. This is a letter from your lender that states how much they will loan you to purchase a home.

It shows sellers that you are likely to be able to get a loan and that you can afford their property.

“That helps the veteran, but also gives the listing agent confidence,” said Ramirez.

2. Offer a down payment

While not required, a small down payment can show that a buyer is committed and has the financial means to complete the deal.

“VA buyers tend to be financially disciplined and stable—qualities any seller should want in a buyer,” said Monroe.

3. Cover reasonable repairs

If sellers are worried about having to make pricey repairs, VA buyers can offer to chip in or cover the costs. This can make VA offers more attractive.

4. Use seller loan concessions strategically

One little-known perk about using a VA loan is these mortgages allow for a seller concession of up to 4% of the purchase price of the home. These funds, provided by the seller, can be used in a variety of ways. 

Ramirez worked with one veteran who secured $20,000 in concessions and used it for upgrades and repairs to the property.

“I can use it to pay off my client’s credit card bills or the veteran can use it to buy appliances,” said Ramirez. “In this case, they used it for repairs.”

5. Leverage lower mortgage rates to make a larger offer

Since VA loans typically offer lower mortgage rates and don’t require mortgage insurance, buyers may be able to qualify for a larger loan.

“You don’t have [those] extra expenses,” said Ramirez. “Therefore, you can afford more house.”

6. Consider cash-backing programs

Buyers may also be able to work with their lender to make all-cash offers to purchase a home. This enables them to pay in cash and rent the property until their VA loan is approved.

"It puts a veil over the VA offer," Ramirez said. "Sellers see all cash.”

Some sellers prefer VA loans  

Many home sellers are open to VA buyers, especially when they understand the full picture.

“Some sellers will take a VA loan just because of pure patriotism,” Ramirez said.

Other VA buyers are making strategic offers that appeal to home sellers.

“I’ve seen countless veterans overcome bidding wars by stepping up with strong, above-asking offers and even offering to cover minor repairs,” said Monroe. “When veterans pair their financial advantage with thoughtful negotiation tactics, they absolutely can compete—and win.”

Anthony Ramirez NMLS # 248819