VA Loans: A Buyer’s Advantage in a Sellers’ Market

McConnell AFB families receive new homes

Veterans may have a leg up with VA loans when it comes to winning bidding wars in a sellers' market.

The zero-down feature of VA loans can help eligible borrowers secure the purchase agreement on the home of their dreams in a sellers' market.

According to a recent Forbes article, housing inventory has hit a 15-year low, but buyer traffic remains high. Fewer homes and more buyers are two key ingredients for a seller's market. Though real estate experts are not declaring it quite yet, one might consider the possibility that a seller's market may be brewing.

In a sellers' real estate market, home prices are often driven up when the supply is low and the demand is high. Multiple interested buyers can lead to a bidding war and result in a home sale above asking price.

VA mortgages with no down payment may be considered less risky

VA mortgages can help eligible borrowers win bidding wars against some conventional borrowers. A borrower looking to obtain a conventional loan normally must show he or she can come up with the cash for the down payment before getting the loan. Most VA loans can be obtained without a down payment; therefore, the zero-down-payment VA borrower will not have to prove that they have liquid assets to obtain a pre-qualifying letter, and would not usually have to meet this extra qualification.

In a recent news release, the National Association of Realtors® (NARS) publicly came forward in opposition to high down payment requirements stating that they can keep many would-be buyers with good credit and income from becoming homeowners. Agents may consider offers less risky if they don't hinge on the buyer having to prove that they have enough money to cover the down payment. Agents frequently advise their clients to take the less risky bid.

Eligible borrowers who want to know more about leveraging their VA home loan benefits in a sellers' market should contact a direct VA loan officer.

Veterans First is a trade name of Wintrust Mortgage, a division of Barrington Bank & Trust Company, N.A., a Wintrust Community Bank. I NMLS# 449042 I Equal Housing Lender

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