When an active duty service member receives a Permanent Change of Station (PCS) they’re allotted 10 days of leave to scout their new town. Ten days isn’t a lot of time when you have to visit a new town, find the right neighborhood, determine the best schools and get a new home under contract. Other buyers using their VA loan benefit have a different type of experience, with more time available to shop for homes. But one thing rings true in all situations — VA buyers need a knowledgeable real estate agent on their team.
You may be helping an active duty service member and have 10 showings scheduled in one day. Or you may be helping a veteran or reservist, with a more casual timeline. Regardless of which type of client you’re helping, it’s important for you to determine quickly if the home you show will meet VA and lender guidelines.
You don’t want to waste your client’s valuable time or money on a home they’ll have difficulty closing. At your next showing keep an eye out for the following five things that could impact your buyer’s timeline, pocketbook or ability to purchase the home.
5 Conditions To Watch For
Wells and Septic Systems. If the home has a private water source, it’s very likely a well test will be required. Talk with your buyer and give them contact information and cost estimates for a well test in your area. If there is a septic system be aware that an appraiser can require an inspection due to a concern with its functionality or safety.
Good Repair. The VA established minimum property requirements to ensure every home purchased by a VA buyer was safe, sanitary and structurally sound. Go through each room of the home and walk around the exterior. Does the home appear to be in good repair? The MPRs are general guidelines, and they intentionally don’t get very specific, allowing the appraiser to identify whether the home meets the three main tenets.
Review the guidelines the VA does provide and become familiar with them. A few items I’ve seen called out for repair included broken glass panes, lack of handrail on stairs, exposed wires and a sub-floor lacking adequate flooring. This is by no means an exhaustive list, but it will give you an idea of the types of things to look for when showing a property. When in doubt, ask yourself this: Is the home move-in ready?
Appliances. The VA loan doesn’t require appliances to convey with the home. But if you show a property where appliances aren’t included you’ll want to watch for exposed wires or other safety concerns that could raise a red flag for the appraiser. If the appraiser finds a health or safety hazard they can require appliances be put in prior to closing.
Heating. The VA requires a traditional heating system in working order. A wood-burning stove or solar panels will need to be supported by a traditional heating system. The idea is that if a homeowner goes on vacation they aren’t keeping a wood-burning stove running, so the traditional heating system is in place as a back-up in order to prevent freezing pipes. If you live in a location where the temperatures rarely dip below freezing, talk with the loan officer and take a look at local requirements to see if a variance is in place.
Manufactured Home. Check the listing and take a good look at the property. If it’s considered a manufactured home be sure that both the buyer and the lender are aware of this from the beginning. Not all lenders offer financing on manufactured properties (Veterans United does in certain cases). Manufactured properties can vary from single-wide trailers to homes that look just like stick-built properties. If in doubt, check for a HUD tag.
Communication is Key
It is not your job to tell a buyer whether they should or shouldn’t make an offer on a home. But it is your responsibility to provide them with the information they need to make the decision themselves. If you notice any of the above five issues with a property while you are showing it, point it out to the buyer and explain how it could impact the homebuying process. It’s also important to communicate the same information to the loan officer. A knowledgeable loan officer should be able to talk you through any concerns and determine if there are any VA or lender guidelines you need to be aware of before proceeding with an offer.