Welcome to SoundBiteBlog.com. This website focuses mainly on providing Real Estate, Mortgage, and Local Area information for consumers and residents in Western Puget Sound, we also share our passions, expertise, and practical insights on Internet marketing and technology, including social media/networking, SEO, website design, and custom web applications. SoundBiteBlog is an award-winning joint venture between Mark Flanders of Pastik Design and Rich Jacobson of Keller William West Sound.
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Share on FacebookWhy do Listing Agents feel the need to interfere with a Veterans’ right to a VA Loan? It is a common scenario.
Many MLS listings make it clear that VA financing is not welcome. Rarely is this because the homeowner requested it. Invariably it is the listing agent’s distrust that instigates the caveat.
VA borrowers go to a loan officer expecting to use their government granted right to a VA loan. They usually have a fairly good understanding of the benefits a VA loan offers. They rarely have a bank account full of cash because our government is not known to overpay the guardians of this country. And they never expect a seller to turn up their nose at government guaranteed money.
VA homebuyers are frequently shocked to find out that many homes are not available to them because the seller will not consider VA financing. Is it the seller who refuses to consider VA financing? No, almost always, it is the sellers’ agent. In most cases the listing agent gives the seller misinformation concerning VA loans and thus convinces them it is not in the sellers’ best interest to entertain offers from buyers using VA financing. Yet in conversation with these same agents, they will tell you with obvious pride, they view their fiduciary responsibility to their seller as a great responsibility.
The most common reasons I am given by agents who wish to avoid selling a home to a VA buyer are:
None of these reasons have any merit. All of these reasons are rooted in the agents unwillingness or inability to acquire accurate knowledge. This, I presume, is because they take their fiduciary responsibility so seriously.
Well Sparky, care to defend the Realtors®? Is there any defense?
Okay, Bucky, as “Ask a Ninja” says, “Gauntlet thrown down, gauntlet picked up!”
You’re absolutely right. There is a sizeable segment of real estate agents out there who deliberately counsel their Sellers NOT to entertain VA Buyers. And some probably don’t even take the time to discuss the matter with their Sellers and simply fail to check the “Available for VA Financing” box on the MLS data entry form.
Almost every seasoned, experienced real estate agent at one point in their career has had a bad experience with a VA Buyer. I would suggest that for many real estate markets, encountering Buyers using a VA loan are an exception. However, in markets like Kitsap County, where you have a very substantial military presence, VA loans are very commonplace.
I myself have had several deals fall through, primarily because of VA appraisers (I’ve posted on this topic before). One of the difficulties in our area with VA loans is that the appraisal process is like playing Russian Roulette or Forest Gump’s Box of Chocolates – “You never know what you’re gonna get!” Whoever is next on the VA approved vendors list, gets the job of appraising the home. Many times it’s an appraiser from outside your market. In our area, even just a few miles can make a huge difference in price valuation.
Why can’t VA allow “area-based” appraisers to participate? Why are we subjected to this “Hit and Miss” approach?
I can empathize with you about having deals go bad.
But, it concerns me somewhat that you are seeking inspiration from “Ask a Ninja”. Is this one of your continuing education resources? That would explain many things about the level of professionalism I see in some of your real estate compatriots.
After having handled dozens of VA loan transactions, I can only think of one time that the appraiser blind-sided the deal. Even then, VA has a system in place to challenge a VA appraisal. As a matter of fact, one of the Realtors in your office successfully challenged a VA appraisal. It happens so rarely, that you just don’t hear about it.
The VA process for chosing an appraiser has been a hotly debated topic for years. So far there are no indications of change on the horizon. And just because a system ocassionally fails, is not a good argument for boycotting. The vast majority of VA transactions go just as smoothly as conventional transactions. The realtors who guide their sellers away from VA buyers, are eliminating a large pool of buyers. In many cases the realtor makes this decision for the seller, without the sellers awareness.
Real estate agents seem to think VA loans are just too much trouble. My question is, aren’t they being compensated to take that trouble on behalf of their clients? Does that not define, to some degree, fiduciary responsibility?
There’s some very sage advice from “Ask a Ninja.” At least I don’t have to put my license number on my business card!
You wanna talk about “Blind-Siding Appraisers?” I had a VA Buyer (young Navy couple with a cute little boy) desperately wanting the home-ownership dream. It was challenging to find them something in our market within their budget. We finally found a VA repo (a fairly new manufactured home on a 1/2 acre) and successfully won the bidding process. Everything was looking great. The appraiser came out and proceeded to critically analyze every detail and to call out a boatload of defects. And we’re not talking about structural concerns, or primary system defects, or safety-related issues. The majority of conditions were cosmetic. And, of course, all conditions were required to be corrected PRIOR to funding. My Buyers were cash-strapped as it was. There was no way they were going to be able to afford all the repairs called out by the appraiser. So we had to back out of the transaction. And guess what? The property sat vacant on the market for several more months, as VA continued to lose money!
And getting back to my earlier point about “Out-of-Area” appraisers…why is it, that in all of my years of real estate, through all of the transactions I’ve been involved in, that the ONLY deal I’ve had where the property didn’t come in at value was with a VA appraiser? And we’re not talking a few dollars, it was over $15,000 below value! The appraiser came over from Kirkland! He was totally clueless about our market here. Last time I checked, there weren’t any Microsoft Execs in West Bremerton! We spent several days going back and forth with suitable comps. I don’t know how the Lender finally pulled it off, but we got the numbers to work, but not without a lot of grief and lost sleep!
Let’s put the shoe on the OTHER foot, Buckwheat! Are there Mortgage Brokers out there who purposely steer VA Buyers away from using a VA loan, not because another loan product is necessarily a better fit for them, but because the Broker can make more money using a different loan product? Hmmmm????
Let’s start with your last, and weakest, point first.
Somehow, the Lender closed the deal. It cost the Realtor® some time, some grief and some sleep! Oh my, that’s a great reason to avoid VA transactions! It certainly sounds like the clients’ best interest are the top priority here. You make my argument for me. We, Realtors® and Loan Officers alike, take on the responsibility of caring for our clients’ best interests when we agree to work with that client. This is not optional behavior for a professional. Yet, because a little sleep might be lost, or because of a difficult transaction in the past, an agent will guide a seller in a direction that eases the life of the agent, but does not automatically benefit the seller. Something is seriously flawed with that line of reasoning.
Let’s apply that line of reasoning. Did you enjoy paying your taxes last year? Well then, don’t pay them this year. Do you lose sleep when a child misbehaves? Just let them misbehave then. If your dog bites a neighbor, it causes you grief. Oh well, let Cujo do what he wants, because it’s just too much trouble. I hope you get the point.
The responsibilities of Realtor®s and Loan Officers include education and research. We are supposed to find the best solutions available to our clients. Then we are supposed to present that information to our clients. VA financing is frequently a viable solution. I don’t challenge your statement that VA Loans have their own set of issues. I challenge the right of a Realtor® to decide for a client what is best for the client, without educating the client first. The benefits and the disadvantages should be presented to the seller in a clear fashion. And the seller should be allow the dignity of making his or her own decision. The property belongs to the seller. If the property does not sell, it is the client that gets hurt, the Realtor loses nothing but time.
Your issue about out-of-area VA appraisers is a valid point and I won’t attempt to argue it. It is the primary flaw in the system. It should be changed. It has not been changed. It is the nature of the game. It has little bearing on the fact that by offering to sell a home with VA financing, the Realtor® increases the number of potential buyers for a property. And THAT is the Realtor’s® job.
In addition, using your example above, the appraisal was corrected to more accurately reflect market values in this area. That happened because VA has a system in place to address that problem. And that part of the system works. A little extra labor on the part of the Agent of the Loan Officer should be shrugged off. A little extra labor is entirely irrelevant.
As to your last point; yes, Loan Officers are guilty of the same thing. It is just as inexcusable for a Loan Officer.
Well, at least you’re willing to admit that both Realtors AND Loan Officers are equally guilty!
I totally agree that as real estate professionals, we exist to serve and represent our client’s best interests. But our experiences, good or bad, help to shape the advice and counsel we provide them. So when I am working with VA Buyers, I explain to them the potential pitfalls associated with that particular financing product.
When I represent Sellers, I provide them with information on what is involved in offering their home to VA Buyers. I never deliberately or intentionally discourage anyone from using VA financing. As a Listing Agent, why would I want to limit the pool of potential Buyers by NOT offering the home to VA Buyers? Unless, of course, I know that there is something obviously wrong with the house that would make it extremely difficult to qualify for a VA loan. Even then, am I the one most qualified to make that determination?
My job is to sell the house, for as much as the market will bear, and in a reasonable amount of time. As a real estate professional here in Kitsap County, many of my clients are Active Military. Some of my most enjoyable transactions have been with VA Buyers. My first two homes were purchased using a VA loan. At the time, it was the only way I could have afforded a home.
Regardess of the difficulties associated with VA loans, ultimately, if it benefits the client, we should put our jaded experiences aside, and do what is best for our clients!
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Okay, so I guess I should qualify myself here first. I suppose many would consider me to be an old dog. I’m not exactly sure when it happened. It was somewhere in between finding it increasingly more difficult to tie my shoes, and, receiving mail solicitations from AARP. Or maybe it was when my youngest son asked me if we had TV when I was a boy? Either way, I am the first to admit that I’m no Spring Chicken, or, at least, a Chicken with no Spring (You get the picture). Although, I am taking Ballroom Dancing lessons with my wife, so that’s gotta count for something, right?
However, regardless of my age, I do pride myself on being somewhat computer literate and having the willingness to embrace the newest emerging technologies (albeit at times, it might appear more like a rather slow and cautious hug!).
This past week, I encountered a real estate time warp.
I am representing some really great Buyers – husband & wife, 8 year old son, Active Navy, soon to retire, looking to plant some roots. We find this really sweet Brady Bunch home. Well, actually, it was more like a cross between “Father Knows Best” and “The Donna Reed Show” kind of house (now I AM dating myself!) Anyway, the house is just right for them. It needs some updating, but it’s immaculate and obviously well taken care of over the years. The house has been on the market for almost 90 days. There’s been one price reduction No offers.
My Buyers and I draft a FULL PRICE offer, but ask for Sellers to pay closing costs. It’s a very clean, very solid offer – good earnest money, only the standard contingencies, loan pre-approval letter, etc. To make sure I have all the bases covered, I call the Listing Agent to see if there are any additional considerations that are important to his Sellers, other than price. We finish writing our offer and I type a nice cover letter that serves to introduce my Buyers to the Sellers, putting “flesh & blood” on our offer. Then, I call the Listing Agent to inform him that I am sending over the offer. As usual, I have scanned the offer and converted it to a .pdf file. If not presenting the offer in person, I always fax and e-mail my offers.
So, I ask the Listing Agent, “Do you want me to fax the offer to your office, or simply e-mail it?”
His response?
Don’t bother to e-mail it, I don’t have an e-mail. And I don’t have a computer either.I’ve been selling real estate now for over 40 years…..(insert very longwinded story about the good ole’ days when homes were sold by a handshake and an agent’s commission sometimes came in the form of livestock, or whatever was shot that particular weekend).
I should have seen the RED FLAGS as they started popping up, but I was hoping this was going to be one of those relatively EASY hassle-free transactions, right? RIGHT! (Yes, Virginia, there is a hassle-free real estate transaction! It just never happens to me!)
We submitted our offer last Friday afternoon, with a response deadline of 9:00 PM the following day, Saturday. As Eddy from “The Greatest Game Ever Played” would say, “Easy Peasy, Lemon Squeezy.” Slam Dunk, right?
WRONG!
At 7:30PM on Saturday, I call the Listing Agent:
Buyer’s Agent: (me) “Do we have a response back yet from your Sellers on our offer?”
Listing Agent: “My Sellers would really like to have the rest of the weekend to think about it. Please tell your Buyers that we’ll have an answer for them by Sunday evenining.”
I inform my Buyers of the delay in response. Although slightly miffed, they heed my counsel, and agree to the requested extension.
Sunday comes and goes. Monday morning, first thing, my Buyers call wanting to know the Seller’s response to their offer. I finally get a hold of the Listing Agent and ask about the status:
Me: “So, do we have a formal response back from your Sellers yet?”
Mr. SnailMail: “I’ve been having problems getting together with the owner’s son. He works for the local electric company and is out on call a lot. The Seller’s are in a rest home and he needs to discuss the offer with them first. Can I get back to you sometime tomorrow?”
I call the Buyers and inform them of yet another delay. The wife is becoming extremely agitated with Agent Timeless. At 5:00 PM, and with still no word, my Buyer calls and instructs me to “pull the plug” on their offer. After much deliberation, I convince them to wait until the next morning before calling it quits. I call the Listing Agent to inform him that our offer will expire at 9:00 AM Tuesday morning if we don’t receive a response from his Sellers.
His response? “Boy, that’s too bad.”
How will it all end? I’m not too sure at this point. For all I know, he might have presented the offer to his Sellers by smoke signal. Who isn’t motivated here? The Sellers? The Listing Agent? Both?
UPDATE: Okay, so we finally got the offer back at Noon today. After four full days, the Seller’s elected to counter our offer by simply reducing the sales price slightly, and NOT paying any of the closing costs. Needless to say, my Buyers have elected not be respond, and the deal dies. So we’re back in the Hunt!
-Sparky-
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Okay, so Buckwheat intimated that at some point we would post about Crusty Sea Creatures. I guess now is as good a time as any!
One of the best things about living here in the Pacific Northwest is the abundance of fresh seafood. Aside from the occasional blackened Salmon, I’m not much of a “fish” eater. It just tastes a little to, uh, fishy.
Now Sushi on the other hand, is a totally different story. I guess cooking it just brings out the “fishy” taste, huh? But alas, I digress.
If you live in the Puget Sound area, you have to love Dungeness Crab. Plain and simple. It would be the same thing if you grew up on the North side of Chicago. You have no choice but to be a Cub’s fan!
Shortly after we moved to the Kitsap Peninsula, we quickly realized that we needed a boat. Trust me, trying to drop a crab pot into the deep, swirling tide waters of Hood Canal isn’t easily accomplished from a 2-man inflatable raft purchased at Wally Mart!
One Summer afternoon, while eating a slice of pizza at Pleasant Harbor Marina, near Brinnon, we discovered the perfect crabbin’ boat. The C-Dory, a 16 foot utility boat, made right here in Washington State. As luck would have it, we found a good used one for sale in a neighboring town, and soon we were proud boat owners. Well, actually, it was more like owning an endless, sucking, monetary black hole. I should’ve just flushed a few thousand down the toilet and called it even.
Well, that’s it for this installment. Look for my next “Sparky’s Crablog” in a post entitled “Boat Ownership 101″ or “Stupid Human Tricks.”
-Sparky-
Share on FacebookAlthough neither group likes to admit it, Realtors® and Loan Officers are salespeople. Many Loan Officers will tell you “I’m not a salesman, I’m a banker” and many Realtors® respond with “Salesperson? No, I’m a Realtor®”. But the facts of the matter are that Realtors sell real estate and loan officers sell loan programs. Hence the statement.
I don’t personally think being a salesperson is a bad thing. I do think being a poor salesperson is. Unfortunately, there are more mediocre and downright poor salespeople in the Real Estate industry than good ones. I work in this industry and I see it daily. Consumers pay the price for this mediocrity. In my previous life (before mortgages) I trained salespeople, hundreds of them in fact. Some of them became very good at what they practiced but most did not. Sales skills are a difficult set of skills to master. But, that is a conversation for a different time. Over time, several common characteristics became obvious. The most noticeable characteristic of a very good salesperson is that they know how to be quiet.
If you happen across a loan officer who spends much time telling you what a good loan officer he is, take note. These days, in the internet age, you find it’s a common behavior. You can see it on social networking sites and it bathes the real estate blog sites. Everywhere I look it seems, I find another Realtor® or Loan Officer dubbing themselves as the “Queen” of this or the “Guru” of that even the “Expert” at something else. I know it’s just advertising, but advertising can be done tastefully. Anyone who needs to spend much time telling you how good they are, doesn’t have much time left to find out what you, as a consumer, need.
This is why I look for the quiet people. They usually understand that it is not a biological mistake that humans are born with twice as many ears as mouths. Quiet people tend to be better listeners. When I am shopping for a loan officer or a Realtor®, I watch for someone who lets me finish my questions. There are few things I find more annoying than someone who doesn’t have the courtesy to let me finish my sentences or questions. Aside from being rude, it makes me wonder if they really heard the question. I didn’t get to finish it so how can they know what it was?
Not too long ago, I was asked by a Realtor® “What should consumers look for in a Loan Officer?”. It’s an excellent question. My answer was something close to “knowledge, empathy and tenacity”. A consumer needs someone who knows what they are doing or knows where to go to get the job done (knowledge). A consumer needs someone who has the willingness and ability to put themselves in the consumer’s shoes (empathy). And a consumer needs someone who will aggressively persue all possible loan or negotiation scenarios (tenacity).
None of these three characteristics require much talking. They all require attention to a consumers’ needs above the salesperson’s needs. So, I look for the quiet ones!
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