Why California Home Sellers Should Consider VA Loan Offers

Recent reports have shown that home sellers in California are sometimes reluctant to accept offers from buyers using VA-backed mortgage loans. This reluctance seems to come from a misunderstanding about how VA loans work.

Some homeowners worry they’ll be subjected to a long and complicated inspection process, or additional paperwork that’s not required for a “regular” mortgage loan.

The truth is, most of these concerns are unwarranted.

California VA loans have a closing success rate and timeline very similar to conventional mortgage products. Additionally, borrowers who use this program often enjoy the job security and guaranteed income associated with military service. So they’re ideal candidates for homeownership.

Along those lines, here are four things sellers should know about California VA loans.

Four Reasons Why Sellers Should Consider VA Home Buyers

When it comes to selling house, homeowners should consider all valid offers from buyers — regardless of the type of loan being used. The ideal offer might come from someone using a VA loan or a conventional mortgage. So it only makes sense to consider them equally.

Here are four reasons why sellers in California should consider home buyers with VA loans.

1. Most VA loans close within a reasonable period of time.

There is a common misconception that the VA loan process takes a lot longer than it would for a regular mortgage loan. But the data show otherwise.

In fact, VA-backed home loans in California often close in roughly the same number of days as conventional mortgage products.

ICE Mortgage Technology, a company that provides software-related services to the mortgage industry, publishes an “insight report” with a variety of home loan trends. According to their most recent 2021 report, VA purchase loans in California and nationwide closed within an average of 55 days.

By comparison, conventional (non-government-backed) mortgage loans had an average closing timeframe of 49 days. That’s only a difference of six days, which isn’t a big deal in the grand scheme of things. And these are just averages. Some VA loans close much quicker than the 55-day figure above.

That same report showed that 73.8% of VA loans successfully closed within 90 days of the original application date. That was just slightly lower than the closing rate for conventional mortgage loans, which was 76.2% during the same month.

On average, VA loans in California do take slightly longer than conventional mortgages. But the difference is so small that it wouldn’t make much difference from a homeowner’s perspective. You get a few more days to pack.

This is just one reason why sellers in California should consider VA loan offers.

2. Many VA borrowers have job security and guaranteed income.

Many of the people who use VA loans are currently serving in the military. This is especially true in California, which has more active-duty and Reserve members than any other state in the country.

People in the military enjoy a level of job security that most people can only dream of. Similarly, they have guaranteed income that tends to rise steadily over time as they advance through the ranks.

These are the kinds of qualities you would want from a home buyer, if you happen to be selling your house. You want someone who is unlikely to lose their job or suffer an income-related setback during the escrow period. VA loan borrowers usually check those boxes.

3. The home appraisal is not as difficult as you might’ve heard.

Another concern among some sellers in California is that VA loans have a “nitpicky” appraisal and inspection process.

In reality, the Department of Veterans Affairs does not require VA loan borrowers to have a complete home inspection. They do require an appraisal, and there are some basic inspection requirements built into it. But it’s not nearly as invasive or difficult as some homeowners seem to think.

We recently wrote an article that explains the basic property requirements for VA loans in California. If you read that article, you’ll see that most of those requirements and checkpoints are pretty basic. They primarily have to do with health and safety features of the house.

For instance, homes purchased with a VA loan must have:

• A functioning electrical system
• Adequate roofing with a reasonable life expectancy
• A clean and continuous supply of water
• Other basic features that relate to health and safety

So we’re not talking about an overly complicated inspection process. Mainly, the VA-approved appraiser wants to make sure that the house is livable for the new occupant.

4. These borrowers deserve a fair chance at homeownership.

Most of the home buyers in California who use VA loans are either active-duty military, National Guard, Reserves, or veterans who have left the service. We can probably agree that these folks deserve our respect. They also deserve a fair chance at becoming homeowners.

We’ve already offered three practical reasons why sellers in California should consider (and possibly accept) offers from VA loan borrowers. Here’s a patriotic reason to go along with them. By accepting such an offer, you’re granting the gift of homeownership to a very deserving buyer.

There’s a recurring theme here. Home buyers who use VA loans to buy a house in California are often ideal candidates for homeownership. Ignoring such an offer, just because of the type of loan being used, would be a disservice to all parties involved.