Vetted VA LIVE – 5 Tips for Getting Your VA Offer Accepted
Welcome to Vetted VA LIVE
Vetted VA Live 5 Tips for Getting Your VA Offer Accepted –
[00:00:00] Josh Lewis: So new project here. This is obviously the, second week, last week we got together with Brendan McKay out of Maryland, Matt Burkhead in Arizona and Nathan Nottingham, the COO of vetted VA was here and we walked through the loan estimate and everything that you need to know when you’re buying or refinancing a home about that loan estimate.
[00:00:20] Josh Lewis: So it’s something you’re interested in. You can obviously go back, check out last week. But we’re back with a new group of experts this week. And what we’re going to be talking about is something that’s really big and really popular. Really important in the current market is getting VA offers, accepted anyone that’s out there.
[00:00:36] Josh Lewis: Writing offers, trying to get a home under contract knows. Most homes are seeing multiple bidding situations and some sellers and their agents may look at VA loans in a less positive light than conventional or other types of financing. So we’re going to talk about that. We’re going to talk about the reasons why that may be and what your realtor and your lender can be doing to overcome that.
[00:00:59] Josh Lewis: Last week, like I said, Nathan was here with us and he did a great job of giving us the five to seven minute overview of what vetted VA is and how the group can help you. Most of you are familiar with posting your questions to the group and we get text answers, some of the video answers. So what we want this here too.
[00:01:18] Josh Lewis: It was a forum where you can show up and get your questions answered live. So if you have a question, post them in the comments after we get through the first part of the show worker, where we’re just going to have a group discussion, we will get to any and all questions over there. I’m going to give you the, one or the two minute overview of what Nathan went through in great detail last week of who these folks are and how they got here before we actually introduce them.
[00:01:41] Josh Lewis: So every vetted professional in the group it’s not something where you just push a button and say, Hey, I’d like to be in this group. You apply. There’s a vetting process, which involves a pretty rigorous open book test. And then from there, you can progress through the ranks. We’ll tell you what everyone’s ranked here.
[00:01:59] Josh Lewis: And basically how you progress is time spent in the group, commitment to the group, taking on additional responsibilities and basically helping members each week. So if you want to know more about that, you can go back to last week. But with that, let’s go through who we have here with us. We’ll start with Diana.
[00:02:18] Josh Lewis: She is a VVA for she’s a realtor with the spiral or aspire Realty group in little rock Arkansas. Anything else you’d like to add to that, Diana?
[00:02:27] Diana Dominguez: No, I’m just super pumped to be here. I’m ready to get started and talk about all of this. Thank you for having
[00:02:31] Josh Lewis: me. No, absolutely. We’re it’s just a better forum to me.
[00:02:37] Josh Lewis: Texts can be one dimensional. So with this where you guys can, go so much deeper into detail of all the topics. So as we said, Diana’s on the real estate side. On the lending side, we have Michelle Dougan with Ms. Lending in Madison, Mississippi. She’s a VVA five, obviously on the lending side.
[00:02:55] Josh Lewis: Anything else you’d like to add Michelle?
[00:02:57] Michelle Dugan: I don’t think so. No super excited to be here and just get to chat with everybody and have a little one-on-one time.
[00:03:03] Josh Lewis: Perfect. And then our final guest tonight is Vic Malone. He is a VVA four lender at peak seven mortgage in Colorado Springs, Colorado Vicki.
[00:03:12] Josh Lewis: You telling us you’re getting some cold weather out there
[00:03:16] Vic Malone: a little bit, icy, a little bit of snow coming on, but Hey, glad to be here.
[00:03:22] Josh Lewis: So we’ve got the map covered. We’ve got California, Arkansas, Mississippi, Colorado. So geographically, we’ve got you covered. We’ve got both the real estate and the mortgage side.
Dealing with VA Loan Misinformation
[00:03:32] Josh Lewis: So with that, why don’t we jump into tonight’s topic of tips for getting your VA offer accepted in today’s market? So starting there any, of you guys feel free to jump in where I always like to start? This is why is it that some sellers and or their agents look down on VA offers or don’t look at them as being as equivalent or as desirable as a conventional loan.
[00:03:56] Josh Lewis: Diana, you have any thoughts?
[00:03:58] Diana Dominguez: I think a lot of it is misinformation. Some agents have not been exposed to be alone and have not gone through those transactions. And I think it’s a lot of misinformation of the appraisal. Some of them think that there are extensive repairs, which is not necessarily the case at all.
[00:04:18] Diana Dominguez: So I just, I felt like we as professionals in the industry need to support the VA alone in educated and fellow professionals that are not as proficient with, the lending process and the appraisal process and how it all.
[00:04:37] Josh Lewis: On that topic. A lot of it does to me, seem to relate back to the fact that the VA loan is unique.
[00:04:44] Josh Lewis: It’s really the only zero down program that we have. And a lot of veterans can get in with no money down and some of them get in with a lender credit and truly have little to no money. And it relates back to that appraisal. So any you guys Michelle, why don’t you walk us through the difference between a VA appraisal and an appraisal on a conventional loan or an FHA loan and what that might mean to a seller in their.
[00:05:12] Michelle Dugan: Sure. So typically on a conventional loan, most of those are looked at as is so whatever state the property is in, unless it is in there’s something majorly wrong with the property. You’re typically not going to see anybody come back and ask for repairs on a property. They’re just going to assess the property as it is in the condition that it is and give you a value based on that for the VA.
[00:05:35] Michelle Dugan: And also similar to an FHA loan, they’re going to go in and look at what they call it. Minimum property standards for the L for the properties and or minimum property requirements, rather. And with those, there can be repairs and such that might come up most of the time, any repairs that are required are typically going to be something that would impact the health and safety of the home.
[00:05:57] Michelle Dugan: And And at the end of the day, truly it’s better for the borrower because it’s going to make sure that the home that they’re moving into is not going to put them in some sort of situation where it’s going to make them sick, or it’s going to injure them by being on their own property that they live in.
[00:06:12] Michelle Dugan: So it’s not, it’s definitely not designed the appraisal is not designed to make it harder to get a loan or to make it more difficult for the seller or the buyer. It’s truly looking at the better intention of serving that borrower so that they’re getting into a home that is safe for them, that it’s not gonna cause them health problems.
[00:06:31] Michelle Dugan: It’s not going to bring up issues in the future. So there are a lot of sellers that can be a little apprehensive when it comes to that, because they’re worried about what. They’re going to have to pay out of pocket and truth. Be told most of the time, if the seller refuse to pay for those repairs, then the veteran could pay for the pay for the repairs to be done.
[00:06:50] Michelle Dugan: You can have the repairs escrowed, you could have options where money is put aside and the repairs are done even after closing. So there’s a lot of different options that are available for veterans which, and that’s similar to an FHA loan as well. In that sense that when these requirements are presented by the appraisal that have to be done for the home to meet the minimum property there’s more options than just the seller simply coming out of pocket.
[00:07:18] Michelle Dugan: I’ve seen agents that went out and painted homes to make sure that they met the minimum property standards. I’ve seen people go out and replace a door or a window just to be able to get the loan to closing. So typically I do feel like a lot of the parties that are working on these, especially when you’re working with local agents and local lenders.
[00:07:36] Michelle Dugan: If it came down to it and my borrower couldn’t get a loan because there was a window that wouldn’t shut properly, then I’d be calling somebody in my family. Hey, you need to go over to this house and make sure that this house, this window can close properly. So there are a lot of options besides just the seller coming out of pocket.
[00:07:53] Michelle Dugan: But at the end of the day, in my opinion, it’s for the betterment of the borrower at the end of the day, It’s
Expectations with Minimum Property Requirements
[00:07:59] Vic Malone: actually something there near those minimum property requirements. If you actually look at them in the VA manual, they’re there, they are not that onerous. They’re not, you can’t have exposed wire.
[00:08:09] Vic Malone: You can’t have a leaking plumbing, you can’t have healing. And so when I talked to the listing agents and I’m presenting a VA loan, I always compliment their house. I’m like they’re like there’d be a blown. Has all these property apart from I know those are some things on the south side of town, but I know that your listing is top of the line.
[00:08:27] Vic Malone: That’s not an issue with that because that, that if you actually look at them I don’t think you’re, I don’t think your listing has leaking piping exposed wiring and the and, generally it does. And, that really eases them off. It makes them feel like they’ve got a Iran, which generally.
[00:08:42] Vic Malone: They’ll hopefully, you see that they have that. And and that really pushes it along. And the other thing on the VA loan, excuse me, the VA appraisal is the, those timelines, but how, when they have to be done are written down. So for Colorado and El Paso county particular, now it matters on what county you’re in and what state you’re in.
[00:09:04] Vic Malone: But for my county and the ones around here it’s seven days. So if I were appraisal date Tuesday next, next Friday, that thing’s going to be okay, reaction next Thursday, that’s due. And so I can say, Hey, I’ll get that little close in 14 days, your house and, so having control over that, whereas on a conventional appraisal it’s whenever the appraiser wants to turn.
[00:09:23] Josh Lewis: And Vic, that’s an important part of that conversation that it’s different. When we order an appraisal on a VA loan, we’re not going to an appraisal management company. It’s not some third party intermediary. We are literally going to the VA. The VA is going to assign that appraisal. They’re going to be responsible for the timelines.
[00:09:42] Josh Lewis: And we also have certainty there and that they post the schedule of this is what this property in this area gets charged. So there’s actually a, again, some certainty there. Dan, anything that you wanted to add on in terms of the appraisal process and on listings or a buyer that you’re representing, what, how you negotiate and navigate that process to make sure the other side understands that it’s really, it’s almost a better process than other types of appraisals.
[00:10:08] Diana Dominguez: Yes, I agree. So Michelle was talking about how some of their peers may just be very minor, such as painting something. I cannot tell you how many times I’ve gone out there taking the paint what seller’s permission of course. And the agent being in in the know that this is happening.
[00:10:26] Diana Dominguez: And as long as the seller was okay, We went just went over there and just took care of it. And that was it. It was very minimal w we’re closing deals on time every day. So I felt the, concerns that most listing agents have really are just based on fear of not getting something gone or over just a second something approved by the VA, but it’s really just like, big said, they are just very minimal and focused on health safety and the home being instructional is out.
[00:11:01] Diana Dominguez: Jimmy to begin
[00:11:01] Josh Lewis: with on that topic of appraisals, a unique thing, not just to VA loans, VA and FHA loans have an escape clause where it was something really common in this market is what buyers want to do is say I’ll waive my appraisal contingency. I’ll cover any gap. And we can’t really do that on VA loans because when you, guys want to address that and explain to everyone what it is and how we can to a degree work around that, or what best practices are for working around that with a seller who’s concerned that the VA buyer’s not going to be able to waive that contingency.
[00:11:35] Diana Dominguez: Sure. I think that I get this, objection all the time. It’s a be alone. It’s not going to appraise waffle. The comps are the same, regardless of whatever loan you use, the comps are the same. The market dictates the buyer’s going to pay whatever they want to pay. Now, of course we can not waive that appraisal, but then, but the buyer can definitely do an appraisal.
[00:11:58] Diana Dominguez: Now we can put a cap on their brains on gap, but we can cover the whole thing and not having that down payment. That benefit really helps them be a buyer to be able to put that money towards an appraisal gap to obtain that home, which you know, right now the market is just so sought after it’s so fast moving, you almost have to, and you have to put your best foot forward.
[00:12:22] Diana Dominguez: I tell all of my clients we may not get a choice or a chance to we may not get a counter. We may not given sometimes someone not even get a response, so we have to put our best foot forward. And they, are sometimes with first time home buyers, which is part of, probably most of my market are.
[00:12:40] Diana Dominguez: You’re scared once they understand the protection that they have also with the V alone, they say, okay we’re we’re gonna look at our finances. We’re going to look at what we can offer the seller, put our best foot forward and see if we can try and win this home.
[00:12:56] Vic Malone: If I can throw that in there, really the only thing they on the VA loan is that there’s nothing, there.
[00:12:59] Vic Malone: There’s no timeline on it. If I had to conventional appraisal, it comes in 5,000 and under you can’t have 10,000, whatever under, and you can’t come to agreement, you can terminate on appraisal. There’s just a deadline in the contract. That’s pretty far into the contract. The only thing the VA appraisal clause does is there’s no timeline on that.
[00:13:17] Vic Malone: There, there’s no specific date on that. And the, bet come back out on that. So it’s not a whole lot different, except that the conventional just had, it has a date after which you can’t do that anymore. And so I emphasize that too as well. Clients, they want to buy a house.
[00:13:33] Vic Malone: You got a solid wants to sell it. We’re going to come to some agreement, as long as everybody’s reasonable on this and a date and a contract, isn’t going to really affect that. Cause by the way, I’m going to, I’m going to be there two weeks before that date in the contract.
[00:13:45] Josh Lewis: Vick along those lines, why don’t you walk us through, if we have a conventional loan, the appraisal comes in low.
[00:13:53] Josh Lewis: We find that when the appraisal gets delivered and you go awesome. I got a five or $10,000 low appraisal. Tell us a little bit about why the VA process of handling that is what it is and how it’s better for everyone involved than a conventional loan.
[00:14:07] Vic Malone: Great question. Joshua that’s what’s called the Tidewater the Tidewater in, the VA that came out of Tidewater, Virginia.
[00:14:15] Vic Malone: And so if the the pager goes with Desi appraisal, and remember he’s only got seven days here. I don’t know Michelle, how she got 10 days or. Was it
[00:14:24] Michelle Dugan: eight
[00:14:24] Vic Malone: days here in Mississippi, seven days some parts of Colorado is 10 days, but it’s still a very short period of time. And so the praise goes out there.
[00:14:31] Vic Malone: He looks at the house and, he will send a notification to me that says, Hey, I looked at this house. I cannot support the value that the contracts that I’m issuing with Tidewater on that, what the Tidewater tells me is, Hey, I’ve got 48 hours to come up with some comps that support the value of the contract.
[00:14:48] Vic Malone: So what I don’t do, I’m not a realtor. I take that and I just done the quarterback. I had to give that to the listing agent, to the, a seller. I tell them, Hey, the prisoner can’t find value. How did you determine the value of this house? Can you send me the comps? They send those to me. We, look them over.
[00:15:07] Vic Malone: We pick the best three, and then we send those into the appraiser. And then the appraiser has something that shows what the value is. I just had this hat. They might get into the next topic is the what happens if they don’t take that. But anyway, this is the only appraisal that the appraisal is the only appraisal.
[00:15:22] Vic Malone: It gives you that opportunity. If a conventional appraiser can’t find the value you don’t find out until they finish the report, they turn it into the appraisal management company, which I can’t even talk to them. And then they take, it, takes them a day to get it. Then they send it back to them. Cause there’s a problem that the, in some database field that they have to get fixed.
[00:15:40] Vic Malone: And then when it finally comes back, it goes straight to the borrower. And it’s several days later. And then that’s when we first find out that the appraisal might be low and that there’s a problem. And so there’s no way to hit it off. There’s no way to have any input into it. And so this is a much, much better process both before the appraisal comes in.
[00:15:56] Vic Malone: And then you’ll probably ask the next lead that to the next question about the reconsideration of value afterward.
[00:16:01] Josh Lewis: Yeah, no, absolutely. And so one thing that I like to point out, I don’t know how often it comes up for you guys or appraisers are in a tough spot, in a rapidly appreciating market like this.
[00:16:12] Josh Lewis: And for the most part, they do a pretty good job of keeping up with the values, not bringing them agregious really low, but what I can say on the VA side, I think in the last. 1824 months. I’ve only had two where we’ve got called out on Tidewater and both of them with the information that we gave them, we’re able to bring in the values, Michelle, Vic, what you guys experienced and Diana as well, when you’re seeing this called in it, to me, it seems like we’re more likely to get closer to our value or our value with Tidewater than we are with having to rebut an appraiser who already told us this is my value deal with it.
[00:16:46] Michelle Dugan: I agree. Having the three different opportunities when you consider that reconsideration of value at the end versus a conventional, where can you submit and say, Hey, why didn’t you use this comp or why didn’t you use that comp? You can submit those, but they’re not obligated to change anything.
[00:17:04] Michelle Dugan: They don’t have to do anything different on the appraisal. At that point, the VA appraiser has to consider these other comparable properties that were considered in coming up with the value for that home when they’re doing their report. So they can’t just ignore them. Like it literally has to be contained within the appraisal report that’s submitted.
[00:17:22] Michelle Dugan: There’s a lot of misconception that VA appraisals come in low and it’s honestly, it’s just not, it’s just simply not true. I feel like the voices that are still putting that information out there just haven’t, they just don’t know. They either haven’t been through the experience of dealing with Tidewater or reconsideration of value and had them be successful or dealt with it within the last four to five years, especially.
[00:17:45] Michelle Dugan: And it honestly, I think it’s just a miss. Misinformed parties, whether it’s the agent or the lender, there are some lenders that just simply don’t even know what Tidewater is. If they’re not familiar with VA lending. And so you’d really just, you don’t have another loan product that is comparable when it comes to the VA loan to get your value met.
[00:18:06] Vic Malone: And one of the things I’m going to throw on there, Josh the VA appraisers at least here, the they really want to do those VA loans and NBA and stay on there. So it being appraisal at Colorado, here’s $800, a conventional one, it’s about 600, 650 of which the appraiser might get 3 50, 400 after the appraisal management, they’re getting twice that number.
[00:18:29] Vic Malone: So they want to stay in good with the VA. Here’s the other thing. I have an 800 number. I can call the VA regional loan center up in Denver, just 70 miles away. And if there’s any problem with appraisal, I can talk to the the, appraisal department up there. They do the evaluation and later on, if I do a reconsideration on anything, the appraiser doesn’t give you a second chance on it.
[00:18:49] Vic Malone: He had, when he had the Tidewater, when he turned in this report, when I do a reconsideration, that’s quite straight to the VA and they’re the ones that are doing it. And it’s a totally different team and they are a total different set of eyes and I’ve had very good success If you get past that point where the appraisal comes in low on the reconsideration of value, which is, wants to get another unique part of the VA loan.
[00:19:11] Josh Lewis: Why, don’t you Vic? Why don’t you explain exactly what that is? So let’s, they, we get a message from the appraiser. Hey, I’m not seeing the value. I’m invoking Tidewater. You have your 48 hours to get us additional information. They come back, they still don’t see it. They bring it in 10,000, $50,000, whatever the number is low.
[00:19:28] Josh Lewis: Why don’t you walk us through what the reconsideration value and what that actually means? Because I don’t think a lot of veterans even have ever got to that point or know what that process is and their agents and sellers considering taking an offer, don’t understand that’s not even an option with any other loan program.
[00:19:44] Josh Lewis: So if you could walk us through it, that’d be.
[00:19:46] Vic Malone: Yeah, the thing is it’s an actual, a formal process or there’s actual process, you go through a reconsideration of value can come in three different forms you can and, those were all laid out. I’m not going to go into detail on what those three different things are, but you look at it.
[00:20:00] Vic Malone: And I just had a very successful reconsideration value. I closed on Monday. The appraisal I’ll use that as an example, a appraisal is unique property. It wasn’t a great homestead. There was on several acres of land, others, there’s barns and several horses and everything. And it came in 80,000 under undervalued
[00:20:20] Josh Lewis: on
[00:20:20] Vic Malone: a 300, 300, a 385,000 car loan.
[00:20:24] Vic Malone: That’s a third off. And and I’ve got this property, the sellers obviously are motivated to sell, but they’re not going to get 80,000 under. So I went to west. I asked her, Hey, how did you determine this value? And she, sent me the the, constitute use.
[00:20:42] Vic Malone: I looked all the comps and then I actually did a a home Canary report on it and got my own comps. And then I picked three of those. And then I just wrote a, case of why I thought the value was, different. And here’s the, thing I didn’t ask for 3 85 and it asks for the 80,000, I asked for 3 25.
[00:21:01] Vic Malone: So that’s what the realtor that I talked to. She goes, this is what they’ll settle. This is what they’ll settle for your buyers. Let’s get it for 50,000 under, they’re going to get 30,000 more than, what they have right now. And they will take that and so I went did all this work and I gave to the VA and I asked for a reasonable amount.
[00:21:19] Vic Malone: I asked for 3 23. Which is still 50,000 under, list. And they gave me a $30,000 increase. Exactly, what I asked for. Boom we closed it the next day. That’s the reconsideration of value process. So you can do it either just by looking at Compston and, all the adjustments you can do it by just something that’s more more of a.
[00:21:39] Vic Malone: A narrative form. Hey, this thing’s got great views. It’s in a much better neighborhood than, the cops. And you, can do a narration, but you still have to ask for a specific amount. That’s I think that’s the biggest mistake people do when they do, are we consideration is they don’t ask for a specific amount.
[00:21:55] Vic Malone: What, do you want them to come up with? One thing I learned. Hey you give the senior officer the answer that you want in your memo. And all he’s got to do is sign. It. That’ll go a lot better than having him actually had to make a decision on let’s see, what should I do here?
[00:22:09] Vic Malone: What you need to do is sign the bottom on exactly what the recommendation was and that’s, the best way to get that
[00:22:15] Josh Lewis: done. And in that process, it’s really, it’s the only one where a buyer can give some sort of narrative of why do I think it’s worth this? In any other process, no one even asks or cares.
[00:22:27] Josh Lewis: It’s like cool buyer. You, there were you. And the nine other people bidding on that thing. It’s worth X, but the appraiser thinks this. You can actually give a little narrative of, I’m not just a crazy person wanting to overpay for a home. I’m out in the market. I’m shopping. This is what I think it’s worth with all of the factual data.
[00:22:45] Josh Lewis: You have any interesting experiences with, reconsiderations, Michelle.
[00:22:50] Michelle Dugan: I honestly think fully it’s not been something that we’ve seen lately. My screen is completely freezing up. Okay. It’s not something that we really see a whole lot of. We it’s, pretty rare that we actually even go into Tidewater.
[00:23:04] Michelle Dugan: Does it happen from time to time? It does. I have not personally had to submit a whole lot of reconsideration of values, but it is really cool though. When you do submit one that they will actually take the veteran’s opinion of the value of that property, because truly at the end of the day, how much is the property worth it’s worth, what someone is willing to pay for it.
[00:23:23] Michelle Dugan: And it’s it could be person a may only be willing to pay this person B may be willing to pay. $50,000 more, but that’s how the sales price is determined on every product, basically in the world. What is somebody willing to pay for it? And that’s at the end of the day, that’s what a home should be worth too.
[00:23:42] Michelle Dugan: But of course the lenders want to know that the money that they’re giving is actually supported by the. With with cops and all of that. So I love that with the reconsideration of value process, they do have the ability to go in and say, Hey, this is why my property is worth this and this wasn’t taken into consideration and it’s got this and it’s got that.
[00:24:03] Michelle Dugan: And sometimes what those particular things mean to one party may be different than what it means to another party. A VA appraiser may look at it and say oh, there’s a barn over here we’re not really putting any, putting much value into that. Whereas for this family, maybe they have horses and that’s what their kids are passionate about.
[00:24:20] Michelle Dugan: And so for them, there’s a ton of value in that. That’s really not even, that’s not very heavily weighed in the appraisal. So I love that they can put their own opinion into what this home is worth and what it means to them. And that it can actually translate into dollars and the appraised value, because you don’t have that with any other program.
[00:24:36] Vic Malone: Let me throw a caution in here. So there are like of the different kinds of ROV. I’ve had much, much greater success on having one where I actually fill out a grid and actually make arguments for specific things. Hey you did bracket, so bracking a property is if you have a 300,000 property all the comps, can’t be two 50 to 90, 2 70 and Hey, it comes into two 70 volts
[00:25:02] Vic Malone: or below that. That’s one of the big arguments I’ll make, Hey, you didn’t bracket here’s here. Hey, here’s some problems you’d have bracket. And then I want it to come in at this value. I have not had great success during the narrative where it’s like, Hey, this thing had a great view.
[00:25:14] Vic Malone: This thing was on, on unique land with these boulders and maces and these unique rock formations and things like that. So if you are going to do an RV, I the point now where I don’t do generally try to stay away from a narrative one, because those that are not as successful, I think the the guys with VA just to have got it, where they can hang your hat on, and yet this guys make a good point in your project check, and then sign off.
[00:25:39] Vic Malone: Oh,
[00:25:40] Michelle Dugan: without a doubt. I think that’s, absolutely going to always be your first choice is just to go to that. Just, these are the facts and these are the comps that are out there because I had one just recently where the appraised value came in a lot less than we thought it was going to come in at.
[00:25:55] Michelle Dugan: And the comps that they use just there were far better comps in the neighborhood. And so once we graph those and send them over it was it was hands down. It really, it wasn’t even an argument. We got exactly the value that we were looking for and not that we were looking for initially, but it was a lot better than what we got from the appraisal and it and it was just based on facts.
[00:26:18] Michelle Dugan: It didn’t have any heart in it at all. But just knowing that you can put that heart in there and that, that is an option it’s just one more option that those veterans have
[00:26:27] Vic Malone: last thing I’d like to throw in here, Josh, just since they were rare, talk about realtor, relationship getting, your offer accepted is that when you get a reputation that you go to fight for, not just your body.
[00:26:38] Vic Malone: But you’re, you actually fighting for the seller. See, when you’re trying to get a reconsideration, you’re trying to get them more money because you’re trying to keep the, trying to keep the deal together, but the making it a necessity, virtual out of necessity you’re also fighting for the sellers.
[00:26:52] Vic Malone: If agents know that you do that and then word gets around on who does what, and if you fight hard for that when you call up that agent next time with another offer, and they know that you’re going to do that, but helps your reputation, especially if you’re using a local lender that knows the local agents and such.
[00:27:07] Vic Malone: And they’re like I had last time I talked to this guy, he he went the extra mile and got this done. So that really helps a lot as far as the, that you go to basketball seller,
[00:27:18] Josh Lewis: So we’ve still got a number of things here to go through, but for any of you that are watching live anyone who may be out in the group we’re here to answer questions.
[00:27:27] Josh Lewis: We definitely want to transition to that. If no questions show up, we’ll just keep talking. But if you have a question anything VA related, anything mortgage or real estate related, we’ve got a room full of experts here. Ready to, answer your questions. So if you have them go ahead, throw them up in the chat and we’ll, definitely get to them.
[00:27:44] Josh Lewis: With that, I kind of wanna circle back. It seems so we jump in everything here that we’ve talked about so far. Is appraisal related. W what is the appraisal? How does it work? What happens if it comes in low? What are the minimum property requirements? It seems like two, two sellers. That’s their biggest concern.
[00:28:02] Josh Lewis: If you have five offers and the best one, or the highest is a VA offer, they immediately go to I’ve got a 30% down, conventional loan over here, and they have the ability to, make up that gap. So people think that sellers have some sort of bias against VA loans and to a degree we’ve gone through that.
[00:28:23] Josh Lewis: And there is that, but don’t, you guys primarily feel like from a seller’s perspective, if you can tell them all five of those offers are going to close in one day and the money is going to be there, they’re going to look and say, give me the most money they’re seeing, or they’re believing that there’s a less certain path to that payday with the VA alone primarily related to not having the money down.
[00:28:49] Josh Lewis: Most of our buyers are VA buyers do goes zero down. If you look at the numbers vetted VA does a great job working with polygon and going through those numbers. But we know the LTV generally is close to a hundred percent on, most of these, what from a realtor’s perspective or for you guys as a lender, what additional things can we be doing to maximize the chances of getting an offer accepted?
[00:29:17] Josh Lewis: So Dan, and when you’re writing an offer for a VA client, what are some of the things that you can do? And these things aren’t even in this market, these aren’t necessarily specific to VA loans. This is just, how do you go to bat for your client and stress to the seller and their agent? What are the strengths of this offer and why should they accept yours out of the pile of offers?
[00:29:37] Diana Dominguez: First of all, we’ll want to try to make sure that we address what the seller needs terms that are just SQL as important as prizes. So talking to the list and agency, and what if they have a specific timeline that they want to move by? If they what is the seller situation or they’re buying something else, do they need a delayed occupancy?
[00:29:57] Diana Dominguez: Do they have something specific that will sway them? One way or the other? I am in an active duty base area. We go almost by timelines and every single offer, so our has to be out by, this date. So let’s not sellers moving overseas sellers coming in from overseas and you have to meet that.
[00:30:17] Diana Dominguez: So it is a fine art too. You’re trying to get everything that the seller wants. Is it still working for the buyers going back to the comps a little bit. I know we already touched this, but touched on this, but I wanted to just throw this out there for anybody that’s listening or watching the once you put an offer in is accepted.
[00:30:38] Diana Dominguez: I try to set myself up for success in my buyers up for success. So I watch the comps or the properties that are under contract in that same year. And we’ll call the agents and ask them and say, Hey when is this closest? They might tell you they might not has this gone through appraisal. Did you have any issues what’s going on?
[00:31:00] Diana Dominguez: When are you guys expected to close? So I keep tabs on every single comp within that immediate area comparable to the property that I’m trying to purchase for my clients. That way I’m prepared. I’m prepared to have something to show the appraiser if I need it. Another misconception that I wanted to go back to the Tidewater and none of the time, what, excuse me, the reconsideration of value.
[00:31:24] Diana Dominguez: A lot of agents will think that it takes. Months because I think once they hear about our government process, they add them onto the thing that he picks forever. The reconsideration of value for, me, I felt like probably has taken max about four days. It’s not months, it’s not weeks. And we are if it comes back at Tidewater does not work, then we submit that reconsideration of value, just like Vic was saying, we are also serving the seller as well, trying to get them more money.
[00:31:58] Diana Dominguez: And trying to come to an agreement between both parties. Now occupancy’s one of them again, going back to what the terms of the offer, maybe shortening your option period in the area that I’m in is already predetermined is already written in the contract. But I know in some other states it’s not like that and it is different.
[00:32:20] Diana Dominguez: If there is an option period can we shorten that? Can we. Do an appraisal gap. Can we have we contribute something to make the seller’s life easier? I cannot tell you how many times I have just offered to clean the house for the seller. And they’re like, oh my gosh, yes, please. I’m just going to move and go that, that offers value.
[00:32:43] Diana Dominguez: And it’s just so small as, and it’s a common courtesy that it helps. It puts you Brent is having to ha having a phone call with the other agent to just advocate for your buyer same with the lender asking the lenders to call an advocate for our mutual client tell them how strong the bile is, call them and tell them what you can about the file and just make them feel more comfortable having that warm, fuzzy feeling is what we’re looking for.
[00:33:17] Josh Lewis: Danny. You said something that’s super important. There is in this. Relationships and I don’t mean relationships. Hey, this is an agent I’ve worked with before. There’s an element of that, of having a reputation of people that you’ve worked with before, but you talked about reaching out and finding out what’s important to the seller.
[00:33:36] Josh Lewis: Is that not a big part of saying we, you don’t know until you talk to the other side what do they want, a rent back? Do they want to be able to just leave some junk in the garage? And there’s any number of things that by, reaching out and finding out what their hot buttons are, you’re showing that you and your client actually care.
[00:33:54] Josh Lewis: Okay. Collaborating on a process that we all want to get to the same thing my clients want to buy this house. You want to get out of the house. The agent wants to have a successful transaction, a five star review, but the relationship piece of that is, is hugely important. And I talked to realtor, friends of mine all the time.
[00:34:11] Josh Lewis: They’re like, I’m blown away. We got 22 offers on this property. Five of the agents even called to follow up on their offers or to find out what was important there. Is that what you’re seeing in your market?
[00:34:22] Diana Dominguez: Yes. Yes. As a listing agent as well I get 10 to 15 offers and I can count on one hand that people that actually call me an advocate for their client, because sometimes they just send the contract and I’m like, where is your prequalification letter?
[00:34:36] Diana Dominguez: I try to vet every single offer for my client. I asked for proof of funds. And when I send an offer over, that’s what I do as well for my buyers. Here’s the proof of funds. We’re covering an appraisal and gap up to X amount. We’re doing cover letters. So are those. The nasty pool.
[00:34:54] Diana Dominguez: Fine. I got it. I’ll donate it. I, this main thought myself we’re on our way. So just trying to come up with, out of the box ideas to help this all, a lot of our our sellers is a lot of turnover here cause we’re in an active duty base area. They don’t want to deal with a lot of stuff here.
[00:35:13] Diana Dominguez: They have a lot of of stuff in their hands already they’re moving overseas. They can’t even take their appliances. So now they’re looking for somebody to buy it or trying to dispose of it. So w we’re there to solve the problems that the seller has. How can I help your seller so that my buyer in your.
[00:35:31] Diana Dominguez: Can come to an agreement on this and we can all be
[00:35:34] Vetted VA Live – 5 Tips for Getting Your VA Offer Accepted: happy.
[00:35:36] Josh Lewis: And, for those of you that are watching either now, or if you watch it later and just watching the recording, this piece is really, important. One of the questions I’m sure, Vic, Michelle and Diana, when we’re moderating a version of this question comes up almost every day that I’m moderating is I don’t feel like my agents working for me.
[00:35:56] Josh Lewis: They show me some listings, or we saw a few houses where they set me up on a search. This is what it takes in this market, in the lesser market where homes are sitting in lingering. Maybe your realtor can send you a list and just shoot over an offer. But like it is that relationship it’s going above and beyond.
[00:36:14] Josh Lewis: It’s demonstrating your professionalism, demonstrating your caring for the other agent and their client. What do you want, what do you need out of this transaction? How do we put it together? And it shocks me when I talk to agents and I find out how few agents work with us. We talk all the time.
[00:36:31] Josh Lewis: Historically we would say it’s an 80, 20 industry, 80% of, and it’s not this isn’t realtors, mortgage people. And, I would say exactly that a mentor of ours says it’s fractal. So it’s 80 20 of 80 20. So it’s worse than 90 10. It’s really, you’re looking for the 20% of the 20%, the top four or 5% of people.
[00:36:51] Josh Lewis: I guarantee if you interview five agents, most of them are not going to tell you, they do what Diana is talking about doing here. And it is critical and essential for, getting an offer accepted. And it’s not all that different for us on the loan side. So why don’t we use that as a transition, Michelle, what are you guys doing to do similar things on the loan side to get those
[00:37:14] Vic Malone: offers accepted?
[00:37:15] Vic Malone: I was going to say that Diana and realtors do 80% and then go the 20% that I put in, but I’m not into that because 75% in 25 minutes, 90 10, I don’t know. Perfect thing that I contributed. And I tell all my realtors, this, that I work with is before, before they ever put an offer in I’ve got the pre-call done.
[00:37:36] Vic Malone: Pre-call means that I pulled their credit, but got their certificate of eligibility. I have your documents. And here’s the big one. I tell them when you’re putting an offer in give me the address, give me the numbers on it, put it on the pre-call. I’m going to run the Aus, the automated underwriting system to make sure that it approves.
[00:37:51] Vic Malone: And then I give him a pre-call for that specific amount. And I do it on a Saturday at five o’clock or a Sunday. It. Whenever they need it, I work on the weekends because that’s when the realtors work. That’s when most, of my clients are working. You might find a skiing on Tuesday, but very Sunday.
[00:38:10] Vic Malone: Yes I’m, definitely doing that. And then here’s the other one you, talk to your realtor to the Diana Domingo’s of the world hopefully you can find someone like that and you edit, you Edify them, the Edify, the clients, you call it, the listing agent. You’re like, Hey you got an offer down the demeanor, when she, one of the top agents here in that Colorado Springs, glad to Glen, we got the offer and I’m the lender for that.
[00:38:31] Vic Malone: And just want to tell you about these perfect the clients that I have. And I don’t obviously say it quite like that, but I tell this I’ve got them underwritten. The only thing I really need to do if your property, can pass underwriting, we’re done. And by the way, do you need this done in 14 days or 10 days?
[00:38:47] Vic Malone: Or do you need it is a house empty? She’s talking about knowing what’s going on. If the house is empty, they probably wouldn’t sell it for. And so we have that conversation. And the realtors I talked to are really blown away that a they’re calling on a Sunday we’re Saturday, or whenever it is that I know, about the address and that I’ve had to that, or the realtor edified the borrower, and they feel really good about the whole offer that.
[00:39:13] Vic Malone: And I have a pretty good success rate with with, of course I have the honor of working some really good realtors and talk rate realtors here. I didn’t know how to write a contract, but that’s, kinda the icing on the cake to give that call Edify, Edify them, Edify the the buyers Edify the contract and tell them that if their property meets my standards are the standards.
[00:39:37] Josh Lewis: One of the pieces that’s interesting to me, I know in other parts of the country, this is foreign to two loan officers, but in California, it’s very common that the agents that we work with when they have a listing, they’ll have us cross qualify the buyers, generally, not every time, but if it’s a little dicey in there, they’re concerned with what we have and what we’re doing.
[00:39:56] Josh Lewis: We’ll get a look at it. And it is amazing to me on the loan officer side, we talked about 80, 20 or 96 for the junk that these loan officers will give. And we’ll pass off as a pre-approval package, like judging by your work, what you have provided the, agent to see. Okay. No way to conclude anything other than you’re not very good at your job, you don’t pay attention to details and you’re not going to be super fun to work with.
[00:40:22] Josh Lewis: So along those lines, Michelle, what does a preapproval package look like? That? When, you put a package together, you have a fully pre-approved buyer. Diana is getting ready to go out and print the offer. What are you giving her? To show what show your work show, what you’ve done and what your, buyer is going to be able to perform.
[00:40:42] Michelle Dugan: Honestly it goes back to a lot of what Vick and Diana said for a preapproval letter I, am always willing to send them out pretty much anytime a day, no matter where I can send it right from my phone, the agents can jump in and they can update it on their own based on the parameters in the loan if they need to.
[00:40:58] Michelle Dugan: But I think having that preapproval letter that is incredibly current, like St listed for this ER, issue the same day that they’re making the offer is really important, especially in this market where rates are rising. If you’re an agent and you’re looking at two offers and one pre-approval letter was issued at the beginning of February, and one was issued yesterday, then you know, that borrow where that was issued yesterday is definitely going to be pre-approved based on these standards, whereas the money that we got pre-approved back in February, they may not even be able to qualify anymore just based on the.
[00:41:28] Michelle Dugan: So I think having that updated preapproval letter is always important. I I have probably issued more preapproval letters in the last two or three months than I have in my entire career. I feel like because we’re constantly updating them for each individual property. There’s a train going by, sorry.
[00:41:46] Michelle Dugan: That’s just where my office is. Your office is
[00:41:49] Josh Lewis: an interesting area.
[00:41:51] Michelle Dugan: The downtown here has a train track that literally runs right through downtown and it’s right by my office. That’d be gone in just a minute. Okay. But I think that really makes a huge difference, especially when you can put that address on there and everything.
[00:42:05] Michelle Dugan: Cause they in, in my market we are a smaller market. I do know probably 80% of the agents around here. If I don’t know them, it’s probably because they’re either really new and just got into the business or they’ve been in the business a really long time and they just don’t really do. Work anymore and they haven’t for years.
[00:42:22] Michelle Dugan: So I know a lot of the agents around here, which is always really helpful. And then I don’t mind picking up the phone and calling them. I had an agent just the other day that called and they said, Hey, like we’ve got these offers that have come in and we have we have one and we really want to accept it from your borrower because it’s the highest offer.
[00:42:39] Michelle Dugan: It’s the best contract that was presented to us, but it’s a VA offer. And I noticed that they’re doing a hundred percent financing, but it says that they they’re willing to cover an appraisal gap up to this amount. Are they actually going to be able to pay those funds? And so we had a really long conversation about that because one, if I if I tell them that this is what they’re pre-approved for, and that they can cover an appraisal gap up to X amount, then it should be just as good as the rest of the.
[00:43:06] Michelle Dugan: The preapproval letter, but there’s a lot of agents that will look at that and think, oh, they’re doing a hundred percent financing. So they can’t cover this appraisal gap, but that’s so far from the truth, because the truth of the matter is that the majority of my veteran borrowers actually have more funds to put down than my conventional borrowers do.
[00:43:24] Michelle Dugan: And I can’t speak to as to why that is, but it’s, just the truth at the end of the day. And so we had a really great conversation just about VA loans in general, and yes, they can do a hundred percent financing and they can still cover that appraisal gap. If it comes in at this the asking price versus what they’re offering on the whole.
[00:43:45] Michelle Dugan: So I think a lot of it is just making sure that whoever that listing agent is, really educated them, giving them all of the information that you legally can give them to show them how strong your buyer is making those phone calls, not being afraid to reach out. There’s, no such thing as a weekend in the life of a, strong loan officer, in my opinion.
[00:44:07] Michelle Dugan: We work around the clock because if that’s what it takes to get our borrowers in homes and we’ve, never been in a market the way it is right now, quite frankly. So if if your lender is not willing to reach out to somebody on the weekend, if they’re not willing to make a call or put those extra touches in there, then.
[00:44:21] Michelle Dugan: Reconsider who you’re working with because that is at the end of the day that can make or break your scenario
[00:44:28] Vic Malone: real short one on here. I know we need to get on the next subject the data supports that the BA loans actually from from offer accepted to closing, have a higher percentage of conventional loans.
[00:44:37] Vic Malone: So if you were to go with a lower country with a lower percentage type of loan, I go ahead and do that. I’d advise going with the higher percentage.
[00:44:45] Josh Lewis: Yeah. And that’s, what I tell all of the agent to say, listen, there’s a misconception. VA is literally the most flexible program in terms of, if we look the test that all, four of us took, you’re looking and you’re like, there’s a lot of gray area in here, but the benefit of that is where Fannie and Freddie this is it.
[00:45:04] Josh Lewis: If you, either meet it or you don’t, even if it’s a dumb guideline, it’s black and white. And if you’re on the wrong side of it, you’re on the wrong side of it. We, I think both two or three of you said, Hey, I reached out to the regional loan center and went through this. You can contact them and you go, Hey, I have a veteran.
[00:45:19] Josh Lewis: I think they’re a good risk. Here’s what the situation is. We don’t have that with any other loan program. Those guidelines are black and white. So there’s that. And then Michelle, you mentioned just a different version of exactly what Diana said. Relationships, the relationships you have with the realtors in the area and being able to just follow up and give people information.
[00:45:40] Josh Lewis: It seems overkill. So again, if you, as an example, if you and Diane are working on a transaction together, she’s reached out to that listing agent had a conversation and kind of felt them out. You’ve reached out, gone through all of the details and it can be overkill. If you’re a listing agent, you have 20 offers.
[00:45:55] Josh Lewis: Do you want to talk to 20 lenders and 20 realtors? No. But the good part of the conversation we just went through. You’re not going to cause only three or four of them we’re even going to bother to try. So you get the opportunity to demonstrate, Hey, if these guys do this in the hope of getting an offer accepted, what do you think they do when they actually have an offer accepted and are trying to close the deal?
[00:46:16] Josh Lewis: So I,
[00:46:18] Vic Malone: that’s also why they always say we talked about using a local lender and obviously realtor’s gotta be local, but a local lender. I’m licensed throughout Colorado, but yeah, pretty much. I think 95% of what I do is right here in El Paso county maybe, a couple up in Denver, maybe even a couple in the county next to me, up in the mountains.
[00:46:35] Vic Malone: But I th that’s really having a local lender means is that they have someone that already has relationships. So you’re not going to get a headset jockey and some call center, Detroit. That’s going to be calling up your realtor. On a Saturday evening if, that’s what’s required or Sunday.
[00:46:54] Josh Lewis: Yeah. Along those lines, what I was going to say is we get this question all the time. There is a large call center that caters to veterans, and we get questions about them all the time in the group. If you’re pre-approved by them, forget all the other negative things, they are not calling and doing these things.
[00:47:12] Josh Lewis: They’re not working with your realtor in that way. They’re trying to refer you to one of their realtors that will pay them a referral fee. And they’re not working with you with you and your professional and this way, I didn’t mean to cut you off. I just wanted to point out that everyone likes to think there’s an easy button or there’s a big 24, 7 lender that they can go to, but you’re not getting this level of relationship and, relational handling of
[00:47:37] Vic Malone: your file.
[00:47:38] Vic Malone: That answers a question. A lot that comes up, it’s like, Hey, what do I have to do to get my offer accepted? That’s a common theme. We monitor. Every single day. And the big thing is the team that you put together, that you have someone that doesn’t try to talk you out of a VA loan, which means that they don’t know how to sell a VA loan, find a different realtor or a lender that is going to go to advocate for you, or that is in some other states that that doesn’t work on a weekends.
[00:48:03] Vic Malone: It doesn’t work. When I think when, your offer is being looked at those are those, are huge things and people ask, what kind of questions should I ask? There are two right there that you can ask to try to I get your team together so that you get your offer
[00:48:16] Josh Lewis: accepted.
[00:48:17] Josh Lewis: And even you say it if you’re, when you’re interviewing, I wouldn’t want to ask someone, if you say, Hey, do you call your mind? If you’re my lender, do you call them? I don’t want to ask them that because they’re going to go, oh, it’s important to them. Say, yes, I asked him what happens when I’m ready to write an offer?
[00:48:33] Josh Lewis: What, do you do and have them tell you what their process is? Yeah.
[00:48:36] Diana Dominguez: Advocate for me, if I have follow one 800 number, just to try to reach your, lenders voicemail. That’s not your person
[00:48:46] Vic Malone: that Pakistani accent.
[00:48:52] Vic Malone: It’s a college.
[00:48:54] Diana Dominguez: Yeah. Yeah, exactly. If I have to leave a voicemail is something that is time, consuming for them to even just call you. If I have to call the one 800 number just to talk to them or just to talk to a voicemail or mainstream machine or something, what am I expecting for my seller or for my client.
[00:49:13] Diana Dominguez: And when I do have an issue and I need answers quickly when there’s I’m Tidewater is how, quickly are they going to let us know that we need to do something it’s, you’re just alone number to them at some point.
[00:49:28] Michelle Dugan: And does your lender even know about Tidewater? How many times have we heard people that pop up and post in the group and they’re like, oh, apparently.
[00:49:37] Michelle Dugan: Like our appraisal went into Tidewater and nobody even notified any of the parties. And then they’re getting information about these chats and the loan officers. Like why didn’t, you didn’t know that I needed to do anything with that. It’s just there’s it’s just like anything.
[00:49:51] Michelle Dugan: There’s great loan officers. There’s good loan officers. There’s mediocre ones. There’s ones that are terrible. And there’s a great loan officers that work for some of these call centers. I have no doubt, but. It’s the affiliation with that company that could keep that potential borrower. It could be one of the best loan officers in the country.
[00:50:11] Michelle Dugan: However, when an agent that doesn’t know this person or has all, they have to base things on or past experiences with this company and they see that company name, they’re not going to know who Joe blow is and it’s not going to mean anything. But when they see the name of either a local lender or someone that they’ve worked at worked with in the past, or someone who submitted a really great preapproval letter and called them and really went above and beyond, it’s going to, it can make all the difference in the world don’t get in that offer accepted.
[00:50:41] Josh Lewis: So we do have a couple of questions here that have popped up before we jump over and take those in wrapping up in tips of getting a VA offer accepted or any offer accepted in this market. Anything that we haven’t covered, that you guys would like to throw out.
[00:50:57] Michelle Dugan: No. One thing that I got the other day was someone questioned and it was actually, it was the same agent that called, wanting to make sure that our borrower had enough funds to be able to pay for an appraisal gap. And she said I know in the contract that it says that the sellers aren’t going to have to pay any fees on this loan, but I did let them know upfront that they would, there still would be some fees that they had to pay because they were the seller and it was a VA loan.
[00:51:22] Michelle Dugan: And I was like what are you basing that on? Because I wanted to hear what she came back to me with. And honestly she is very familiar with the real estate industry she’s been at for many, years. Used to be on the title side for a long time. And she was referring to really old.
[00:51:39] Michelle Dugan: VA lending guidelines. And so I was I got the great opportunity to be able to educate her and say, no, actually this is the case. And went through that. The the seller really actually shouldn’t have to pay anything more on a VA loan than they do on any others. And so I think education honestly is the biggest piece in this in NBA lending.
[00:52:01] Michelle Dugan: I was looking earlier, so in, on an FHA loan, in the FHA handbook, there’s 1500 pages to the FHA handbook. Now the VA combined hand, like the 26, 7 now has, let’s see. It’s got 616 pages. So it is substantially more condensed. And there is a lot of gray area. Like you talked about there, Josh, and, but educating these realtors on why the gray area can be good for the borrowers letting them know these guidelines change just like any other loan.
[00:52:34] Michelle Dugan: So what you knew about VA lending 10 years ago is not necessarily the case anymore. And so I think education is just a huge piece of it. And as lenders it’s a great opportunity for us to get out there and help educate them for other realtors that do a lot of VA lending. Don’t ever be afraid to share this information and for if you’re a borrower and you’re listening and as a part of vetted VA, make sure that whoever you’re working with is incredibly, just well versed in not only the loan, but in dealing with realtors and helping educate them.
[00:53:06] Michelle Dugan: And that they’re willing to go that extra mile for you.
[00:53:10] Josh Lewis: So with that, let’s jump in here to the first question. It relates back to the Tidewater. When we were talking about that one of the viewers popped up. Can I pay someone to help me to debate the, low appraisal? Any of you guys want to handle why that wouldn’t be necessary and who should be handling that for them?
[00:53:29] Josh Lewis: Yeah
[00:53:29] Vic Malone: that’s, part that’s, covered in the cost. You have a good lender. That’s my job is to you. Go ahead and, put that together. I talked to them, I talked to the realtors, talk to the we look at the data and put that together. So that’s not something that you have to pay someone that’s what your loan officer does, but that’s part of the.
[00:53:51] Josh Lewis: And you’re probably working with the realtor or both of the realtors in that transaction. They’re the experts in the area, like Diana said, she’s actually monitoring the comps that are on the market that haven’t yet closed and may be able to tell us more about the market than, what you would be able to know just from digging in the MLS or other database.
[00:54:11] Diana Dominguez: And you know what, it all goes back again to relationships. When we have these comms that are waiting to close and they’re under contract we can gain valuable information about, we’ve tried to stay ahead of the market and trying to solve problems before they arise. And another thing that I wanted to say with, the Tidewater and the reconsideration of value, just Michelle pointed out, there’s that option to have the veteran advocate for themselves in the ROV process and in my area it’s interest in how it affects people because we have active duty military members and their families staying in hotels, trying to find housing.
[00:54:54] Diana Dominguez: Then they’re trying the, offers that they’re trying to win and then something like this happens and they can put it into words to the VA, into the the appraises and all that stuff, and then emails us, Hey, this is actually costing us money, more money than we’re fighting for here.
[00:55:13] Diana Dominguez: This is what we are where we’re spending we’re S we’re probably looking at another two weeks in a hotel. So we’re trying to all work towards a common goal and having that option, no other loan gives you that option. And I love that because this is all about the veterans.
[00:55:28] Diana Dominguez: This is all for their benefit. And It’s
[00:55:34] Josh Lewis: really surprising to me, the misconceptions on largely on the agent side, most of us on this side, maybe a loan officer, hasn’t done a VA loan, so they’re not intimately familiar with it, but you should know of these flexibilities. And just like you said, we don’t have it with any other loan programs.
[00:55:50] Josh Lewis: So it’s really the exact opposite of what the perception is that everyone should be like, this is awesome. I get to have input throughout the process and I’m more likely to get a value close to my sale price with a VA loan than almost any other type of, loan program. So with that, we have another one, and this is a, this is more of a long question.
[00:56:14] Josh Lewis: We’re gonna, we’re gonna be building a house. Are there any special things that we should know with financing? Also, we’ve talked to a couple of lenders and they do not do VA loans. Have you heard of lenders not wanting to do VA loans? They’re in, Idaho. Yeah the, answer is, yeah, we probably all have heard of it.
[00:56:30] Josh Lewis: You guys wanna want to talk about that and maybe also talking about what, building a house looks like and even potentially a one-time close.
[00:56:40] Vic Malone: I’ll go ahead and touch on that one. So there is a thing called the VA construction loan that just came out recently a couple of last couple of years.
[00:56:48] Vic Malone: I think I first heard about it about five years ago or so, but the VA construction loan allows you to buy the land and build the house altogether. Now, a lot of people think, Hey, I I can like I can’t win in this market. So I’m just going to build my own house. Probably not the best way to go, to build, a house.
[00:57:05] Vic Malone: Even with the VA loan, you’ve got to have some reserves. You’ve got to have some depth to your finances. So if you’re scraping by. And you could do a VA loan, but you’re like, I’m just going to build a house because it’s easier to buy some land and then build on it. That’s actually a very, expensive proposition 25,000 for a sewer water hookup see hookups.
[00:57:25] Vic Malone: Those things all add up another part of it, but you have to be pretty savvy on how to do that. And so hopefully the people that grew up looking, doing big construction loans either have some background in, in in, building or construction R had built a house before had been prior homeowners.
[00:57:41] Vic Malone: I wouldn’t recommend anybody. That’s a first time home buyer going through a BA construction loan. It’s a pretty, pretty arduous program, and it’s not a great place to have a learning curve and take it from. Yeah, my first construction was building, building my own house the old one burned down, but yeah, so it wasn’t anything of choice or anything, but still I learned a lot of stuff and I paid you a lot of idiot taxes when I pulled that house.
[00:58:07] Vic Malone: So it really helps you to do, to have that kind of depth getting back to can you do that in Idaho? Can you find somebody? I contacted a better VA rep if they don’t do VA construction loans, they know someone nationally that would do would be a construction loan in Idaho. We have a lot of resources for that.
[00:58:22] Vic Malone: Not every VA loan officer does VA construction loan. You’re very, time intensive, very they, take a lot of depth of knowledge. Not everybody has that. You actually have to take classes on how to go through doing that. And it’s a long process. Definitely it’s a great program that is out there.
[00:58:39] Vic Malone: I’ve talked to, I probably a hundred people about a construction loan and I’ve had one. Because you know what made that they realize, wow, this is a lot more than a, than I really thought
[00:58:52] Josh Lewis: similarly, the logic, you totally get it. Like it’s funny. Everyone thinks their market is unique.
[00:58:58] Josh Lewis: Almost said in California in any of the 50 states, the market is nuts right now, and it’s hard to get an offer accepted. So these buyers first-time buyers like there’s a piece of land over there and it’s been there for a while. I can get a reasonable price and if I could build, then I can have a new house.
[00:59:12] Josh Lewis: But just like you said, long process involved process, you have to have more financial wherewithal to get through that. So unfortunately it doesn’t work really well. And what I would say, I’ve flipped over 40 houses in the last 10, 15 years. And with that level of experience, I wouldn’t want to get into building a house in, this current market, the contractors are buried, so they get to charge a lot.
[00:59:35] Josh Lewis: They’re not as fast as what they normally are. We’ve got supply chain issues and all that fun stuff. So it’s certainly not meant to discourage anyone from building. If you have a good builder and you have experience and you have the financial depth, absolutely. Go ahead and do it.
[00:59:52] Vic Malone: Let me throw one other thing in there.
[00:59:54] Vic Malone: A big misconception too, is that if you’re doing a new construction through a builder in an established neighborhood, so I’m doing a new bill. That’s a totally different thing than VA construction on VA construction loan is you don’t buy the land. I’m going and hiring a contractor and I’m going to find the plans on it brings us all together at one point and it’s, a six month process and I’m gonna have a.
[01:00:12] Vic Malone: Approved up front and then I’m still making payments and everything’s done. That’s the VA construction loan. If you just go into a new build development and you’re gonna buy a new built house where you can go to design center, pick out all the the tiles, the backsplashes, the cabinets and all that.
[01:00:27] Vic Malone: That’s just a regular VA loan. You go there, you do that. You put a deposit down. Normally it’s not that much. They built the house when it’s done. You get your certificate of occupancy and then you close on the loan and that you occupied just like any existing house. So a big misconception.
[01:00:41] Vic Malone: We had a lot of questions about that as well. But just wanted to make sure that documentation was put out there.
[01:00:48] Josh Lewis: Absolutely cause a regular new build a builder’s putting up a new development with 40, 50, a hundred homes. You just put it under contract and you use any lender. Can, do the VA loan with that.
[01:01:01] Josh Lewis: We don’t have a ton of questions here before we let everyone go. And any other comments or thoughts that you guys have that you’d like everyone out there to know.
[01:01:10] Diana Dominguez: I did have one thing if I could. I wanted to just touch base on also repairs with the, a lot of the, of those posts coming in.
[01:01:21] Diana Dominguez: Should I waive my inspection in good conscience, I wouldn’t advise anyone to waive their inspection. However, what you can do to combat that would be, prepared, know what your deal killers are. Usually if you have the if you’re going to a show in, and it’s 15, 20 minutes long, you usually would have access to the furnace, see how old it is see how the roof looks.
[01:01:49] Diana Dominguez: Yes, you’re not a general contractor, but at least you have an idea. Most of the, big ticket items will have stickers. The furnaces stickers that water here has your stickers, that this is more of a technical or mechanical part of the process.
[01:02:06] Diana Dominguez: But that’s another way to try to see what you are comfortable with. If you know that furnace is going to need to be replaced in the near future and during your ownership, then how to budget or where to budget, or at least you have that knowledge going into it when you make that offer that way.
[01:02:27] Diana Dominguez: There’s no no, nothing that you could have no before we’ll make you try it or second guess your the process. So that’s something that I try to coach my clients on. Let’s see what it looks like. Let’s look at all of the elements what do you think that you could do to this home so that it could be a good investment or do you have any, feedback on the homeless?
[01:02:54] Diana Dominguez: And sometimes even as the market is very sought after and very fast movements, sometimes it’s just not the right house for them. And we’ll continue to keep looking until we find.
[01:03:05] Josh Lewis: Vic Michelle, any closing thoughts?
[01:03:08] Vic Malone: He’s a big, thing. Big thing is just making sure that you get it from from the get-go hopefully what you can take away from this little talk we’ve had is help you formulate some questions you have.
[01:03:18] Vic Malone: Before you go out and look at houses, you should have a lender. Obviously you have a realtor, but a lot of people skip the lender part, but you want to have a lender that advocates for you, and that, that knows your product that you have. And so make sure you interview a couple.
[01:03:31] Vic Malone: I have no problem. People want to want to interview me with several others because I know that the knowledge that we bring here with vetted VA is second to none. And I knew I you, want some of the advocates for you that understands the program and it has a proven track record. So those are the things you look at and not just make make sure it’s not just a someone that sounds good on the phone.
[01:03:54] Vic Malone: Okay. So put your team together early. Yeah.
[01:03:59] Michelle Dugan: Yep. I agree. And then, and just don’t give up that’s the biggest thing right now, too, just because the first offer or the second offer, isn’t accepted just if it’s in your heart to buy, and that is what you want to do and need to do, just don’t give up in this market because there’s there’s a lot of other people that are in the same similar situation that are going out there and they’re having to put in multiple offers before they get accepted.
[01:04:22] Michelle Dugan: But as long as you have a team that’s working on your behalf between your realtor and your lender, it will happen. It’s just a matter of a matter of if or an hour, sorry, not a matter of if, but a matter of when and and just don’t give up, don’t let the first if somebody tells you no, the first time that’s okay.
[01:04:38] Michelle Dugan: Move on to the next one. That house wasn’t meant for you.
[01:04:41] Josh Lewis: No a thousand percent. And going back to what you had said, Vic, I never am going to be mad at someone who, wants to shop for a loan. Cause what I can say that people that I talked to after the fact who had the worst experience, who had the worst thing happened are the ones that talked to one person, one.
[01:04:59] Josh Lewis: One realtor, you have no point of reference. Like I tell people, if you talk to three people, if you talk to five people and you don’t choose to work with me, that’s on me. I didn’t give you the confidence that we had your best interests at heart, more than anyone else does. If we lose one or two that way, I still feel better that the client shopped and has a frame of reference and knows what’s out there and didn’t get stuck with the first person or their cousin or their neighbor or their coworker who just got their real estate license or does loans on the side.
[01:05:32] Josh Lewis: We hear that all the time. We all laughed because geez, probably what once or twice a year, you hear a horror story of, Hey, my cousin just got their mortgage loan officer license. And so I feel like they used to do their first transaction. And here we are in the 11th hour and everything went to hell.
[01:05:45] Josh Lewis: Like I’ve never
[01:05:46] Vic Malone: ridden a horse before, so can you give me a horse? It’s not been written so we can start off. Yeah.
[01:05:51] Josh Lewis: Yeah, no, it’s absolutely crazy. So it’s been a great conversation. It’s difficult. Just like Michelle said, it’s a difficult market for everyone, not just VA buyers, FHA buyers, conventional buyers.
[01:06:03] Josh Lewis: Everyone’s having a hard time, nothing worth doing is easy. So be tough. Do your due diligence and what you can see here. We do have somewhat of an easy button, more so on the lender side, because we’ve got really great lender coverage and the vetted VA group. We’re adding realtors at a rapid clip, but you do want a local realtor.
[01:06:25] Josh Lewis: But the vetted experts are not the only people that are great at helping veterans get into homes, but there’s a lot of people out there that have never worked with a VA loan, a VA buyer, VA financing. So whoever you’re interviewing, whether it’s one of the vetted pros or an outside expert or realtor or lender, make sure you ask them how many VA loans have you done?
[01:06:46] Josh Lewis: How many VA buyers, how many buyers have you represented with VA financing? It doesn’t mean that you need to just automatically exclude them, but it’s a unique product. And I think you can see from the passion that the, that these three have that it’s a unique product. And if you understand it, you should be able to use it to, the veterans advantage to reward them for, what they did.
[01:07:10] Josh Lewis: Actually it looks like Nathan says we, have another question, Nathan, you wanna, you want to throw up the question? Oh, this is a good one. How about self-employed? What can I do to get pre approved? So at the end of the day, self-employed is only different in the sense of how they get their income show.
[01:07:28] Josh Lewis: You want to talk about how you get a self-employed borrower, how that, conversation is going to vary and what you need to do differently.
[01:07:35] Michelle Dugan: Sure. So any of my self-employed VA borrowers, the first things that I’m going to ask for after I pull that certificate of eligibility, or at least attempt to pull it in is I’m going to ask for their tax returns.
[01:07:46] Michelle Dugan: Cause I’m going to want to look at those and evaluate those. And we’ve got formulas that we plug all the numbers into and we’re going to look we can come up with that saying the income, the same way that we would, if we were to look at your pay stubs, if you were a W2 borrower. So just because you’re, self-employed, it’s is there a little bit more documentation that you’re going to have to provide?
[01:08:04] Michelle Dugan: Yes, there is. I think it’s just like with anything you own your own business. And so there’s a benefit that comes with that. But when you get, go to get a mortgage, you’re going to have to provide a little bit more paperwork. The biggest thing is you’re going to have to provide those tax returns.
[01:08:18] Michelle Dugan: You may have to answer some questions that a borrower that’s a W2 borrower doesn’t have to answer, but typically if you’re working with a good loan officer, the fact that you’re self-employed should not hold you back in any way from getting at VA.
[01:08:31] Vic Malone: The big problem on self-employed comes. If you’re like, Hey, I’m getting out of the Navy, I’m getting out of the military and I’m going to start my own welding business or start my own that, in that case, nobody can help you.
[01:08:42] Vic Malone: You have to have a track record because anything where I don’t know what the percentage is. A large percent of businesses fail in the first couple of years. So what we want to see is that you have in two years history. So like Michelle was asking for the, to use the tax returns.
[01:08:55] Vic Malone: That’s cause you have to have your business on there for two years before we can use that for income. Once you have those two years it’s, not a problem. It’s, very easy to do that analysis. It takes a bit more work, but it’s no more problem getting that approved than it is a W2.
[01:09:11] Michelle Dugan: And, having said all that when you are, self-employed, there’s a lot of things that you can write off. In your first year of being self-employed, if you’re considering that you want to buy a home after you’ve had your business for two years, don’t be afraid to go ahead and reach out to a lender early and have them say, Hey, this is where my tax returns were this year.
[01:09:31] Michelle Dugan: Is there anything I need to do different next year? Should I change some things? And we’re not going to give you tax advice, but we can give you information from a mortgage perspective and say, Hey last year you wrote off all these expenses. And at the end of the day, this is all that we can use for your income, for you to be able to purchase the home that you want.
[01:09:48] Michelle Dugan: We’re going to need to see an income of around this amount. And then at least you have an idea of where you need to head in the next year, in your second year of business. So it’s never too soon to reach out as a self-employed borrower, whether you’re ready now, whether. You’re going to hit that two year mark next year.
[01:10:05] Michelle Dugan: If there’s somebody out there that is self-employed, that wants more information on that. Reach out to your lender sooner rather than later, because you can’t can you go back in a min taxes? You can, is it a huge red flag across the board and mortgages with the IRS? Everybody.
[01:10:19] Michelle Dugan: Absolutely. You, want to make sure that you’re showing the income that you will need to be able to purchase that home. And I think that’s probably one of the number one things that people that are self-employed start to run into is one either you don’t have enough time and having your business or two, you don’t show enough bottom line income that we’re going to actually be able to use for the mortgage purposes, because what you brought into your.
[01:10:42] Michelle Dugan: And what we can use for your income for your business at the end of the day are not the same
[01:10:45] Josh Lewis: numbers. And that’s usually the question behind this question. Hey, I’m self-employed I heard it’s hard for me. It’s not hard for a self-employed person. It’s different in that you have the ability to deduct a lot of expenses that an employee can’t.
[01:10:59] Josh Lewis: And when you take that benefit, you might say, Hey, I made $125,000. Oftentimes when you send Michelle that tax return, yes. Your business brought in $125,000 at the bottom line, you made $42,000. So that’s it’s important. And what she was saying in terms of starting early we’re right here before tax time.
[01:11:18] Josh Lewis: Every time this year, I ended up with 2, 3, 4 self-employed borrowers that are like, can we look at my tax return both before we file it and you go through and you go, there’s no law that says you have to take every deduction available to you. You can overpay your taxes if you choose to. So it’s, again, we’re not giving you tax advice.
[01:11:37] Josh Lewis: We’re saying, Hey, your gross, your top-line income was plenty. But if you claim that you had all those deductions, that bottom line is not going to get you the house that you want.
[01:11:46] Michelle Dugan: That’s all right. Don’t expect to not pay taxes into the government based on your income, and then get a government land. They want it, they want to see that income and those taxes being paid.
[01:11:59] Josh Lewis: Okay Hey, we have another question. I think they were holding out on us. They told her they waited until we said, Hey, we’re going to go for this week. And then now the questions popped up. So this one here, my wife and I are in Parker, Colorado somewhere that Vick may be familiar with. And currently going through the pre-approval process, I retire at the end of June or in a tough situation with rates, climbing and waiting for retirement slash disability rating to kick in.
[01:12:22] Josh Lewis: Also have a job offer that won’t take effect until July. What advice could you provide, buy a house with current lower rates or wait until disability rating to waive the funding fees?
[01:12:33] Vic Malone: Let me jump on that one. If you’re, if you have a job offer that starts within 60 days of closing and you’re starting July if you’re closing in, if you’ve got a contract here in April, you’re closing in may, June.
[01:12:43] Vic Malone: July that’s within 60 days can do that loan all day long. And then also if you’re getting retirement we can, you, we can actually run a retirement estimator. You can get one from the Navy, or I don’t know if he’s Navy or army or appropriate partner, probably army. But you can get a retirement estimator and that will show how much you’re going to get through retirement.
[01:13:04] Vic Malone: We can actually put that through and get that approved as well. You’re not when you should disability, cause you’re not having a disability rating, but we definitely use your retirement. We can use your current job offer,
[01:13:14] Josh Lewis: but if that disability rating you’ve already started the process and it’s in process and you later have your disability rating kick in, you can get that funding fee refunded.
[01:13:25] Josh Lewis: As long as you’re in process at, time of application,
[01:13:30] Vic Malone: it ha it goes by the effective date and the effective date is going to. The date of retirement. So if you put if, I’m a retired guy and I put in a disability rating now, and I, it gets awarded in a year and in meantime, I go buy a house.
[01:13:42] Vic Malone: I can get that award back because my effective date is a date. I put it in. If you retiring the effective date of your disability can be the date of your retirement. And so that’s going to be the earliest that you can get that funding few weeks.
[01:13:54] Josh Lewis: So for him, since he’s not already retired, the retirement date and the disability to date will be further into the future and NLB.
[01:14:01] Josh Lewis: Okay.
[01:14:02] Vic Malone: Yeah. Yeah. The fact of day’s gonna be the day after, after you your, last name again.
[01:14:07] Josh Lewis: And they did follow up and confirm it was Navy. I think you were you knew it was a Navy service when, you started answering the question. Okay. So this time, I think for real, I don’t think we have any more questions, but just again, leave with the thought that relationships matter relationships of the professionals that you’re working with, that they work well together, your realtor and your lender are working well together.
[01:14:32] Josh Lewis: Your realtor has good relationships in the community and they all have a good relationship with you and with the VA loan process. So keep your head up, keep trying if you’re getting offers, not accepted, make sure your team is doing all of the things that we talked about to help you get those offers accepted.
[01:14:48] Josh Lewis: It’s definitely worth it. So stick with it and check back in with us next week. We’ll be back next Tuesday with a new group of experts and a new topic, and we’ll be waiting for more questions.
[01:15:00] Vic Malone: Thank
[01:15:00] Diana Dominguez: you, Josh. Via.