VA Loan - First time home buyer

[StartingOver10]

Normally you want your own agent rather than using the seller's agent. The seller's agent may have a fiduciary duty to the seller depending upon the agency representation the seller has signed with their agent. What agency representation did the sellers agent represent to you for your side? 

Here are the available ways an agent can represent you in Virginia: http://www.mojo.biz/content/Virginia/articles/agent-representation.htm

Not all agents are the same.  Find one you have confidence in or the purchase will be difficult.  

Note that Sellers have their own ideas of what is acceptable or not. You can't assume that the seller listens entirely to just the agent's presentation of the offer.  When the agent presents an offer to the seller they also (usually) present a 'sellers net sheet' so the seller can see where they are financially with the sale. But that is not the entire analysis. The strength and reputation of the lender are a factor too as well as other terms in the offer having nothing to do with the dollar amounts (closing dates, inspection days, etc). 

[Anonymous]

yes, I can certainly see where there would be a conflict of interest in a dual agency transaction.

The seller's agent never represented that it would save me any money by using dual agent or that the seller himself was agreeable to dual agency in the first place. 

I'm not looking to save money this way though.

One thing that I'm wary of, is to offer more than the list price or what the comps justify. My VA loan is pretty much dependent on the VA appraisal process, which seesm to be notoriously stringent in this area (near DC).  I'm not in a position to pay $$ if the VA appraisal is lower than the list price. I would have to negotiate a lower price with the seller in that scenario

My buyer agent has suggested to offer more than the list price but I'm not comfortable doing that in future offers then have the deal fall through during the VA appraisal.

[StartingOver10]

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@Anonymous wrote:

yes, I can certainly see where there would be a conflict of interest in a dual agency transaction.

The seller's agent never represented that it would save me any money by using dual agent or that the seller himself was agreeable to dual agency in the first place. 

I'm not looking to save money this way though.

One thing that I'm wary of, is to offer more than the list price or what the comps justify. My VA loan is pretty much dependent on the VA appraisal process, which seesm to be notoriously stringent in this area (near DC).  I'm not in a position to pay $$ if the VA appraisal is lower than the list price. I would have to negotiate a lower price with the seller in that scenario

My buyer agent has suggested to offer more than the list price but I'm not comfortable doing that in future offers then have the deal fall through during the VA appraisal.

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It doesn't always fall through if the appraisal comes in below sales contract price - sometimes the seller just has to see that the appraisal came in at $X before they will reduce the price to the appraised value.  There is a strategy where you offer more than list to get the house contract accepted and then when the appraisal comes in lower, your agent has the seller reduce the contract price to the appraised value. It is a two step process - but the seller needs to understand up front that you aren't going to bring in extra cash over appraised value.  Discuss this strategy with your agent. (It is frequently done in your area)

I know that the pricing in Virgina near DC is crazy. Your area never did experience the downturn that the rest of the country went through in the great recession.  So you are working in a difficult market.

[Anonymous]

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@StartingOver10 wrote:

It doesn't always fall through if the appraisal comes in below sales contract price - sometimes the seller just has to see that the appraisal came in at $X before they will reduce the price to the appraised value.  There is a strategy where you offer more than list to get the house contract accepted and then when the appraisal comes in lower, your agent has the seller reduce the contract price to the appraised value. It is a two step process - but the seller needs to understand up front that you aren't going to bring in extra cash over appraised value.  Discuss this strategy with your agent. (It is frequently done in your area)

I know that the pricing in Virgina near DC is crazy. Your area never did experience the downturn that the rest of the country went through in the great recession.  So you are working in a difficult market.

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I wish my previous agent had explained it to me that way, it would have been more flexible on my offers.

Out of curiousity, I called a local lising agent and asked if she would be open to dual agency ona property? Initially she said yes, but later came back and said it would make the transaction appear "too cozy" so she would have to refer me to another agent in her office to fill the role of buyer's agent

Her second reponse sounded very sincere, though she would've been able to pocket the full commission, she did what was right for the transaction. Her client is a house-flipper so the seller's agent is looking to get him the most money for his investment

[Anonymous]

So this crazy thing happened: last week my VA loan offer was beat by a conventional offer, it turns out that the guy who made the conventional offer walked out on the deal at the last minute, in fact the seller's agent told us that guy had done it before so now he's gonna get blacklisted by local agents.

The property has gone back on the market and the seller's agent is meeting with the seller to see how they want to move forward. My previous offer is still on the table but it appears that neither the seller nor the seller's agent even read my offer letter since "all eyes" were on the other offer that had promised them 45% down payment.

Kinda irked that I was beat by a bogus offer, but will soldier on

[Anonymous]

The seller is now considering my offer. I requested that the seller pays 100% of the closing costs and my agent has a verbal counter offer from the seller agreeing to 50% of the closing costs. This is a bit challenging but not impossible. However, I'm going to respond to the counter offer and see if the seller will agree to pay 75% of the closing costs.

Worst scenario at this point, is that I end up paying 50% of the closing costs, so I'm in a good spot right now

[Anonymous]

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@Anonymous wrote:

The seller is now considering my offer. I requested that the seller pays 100% of the closing costs and my agent has a verbal counter offer from the seller agreeing to 50% of the closing costs. This is a bit challenging but not impossible. However, I'm going to respond to the counter offer and see if the seller will agree to pay 75% of the closing costs.

Worst scenario at this point, is that I end up paying 50% of the closing costs, so I'm in a good spot right now

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Will keep fingers crossed for you.  Keep us posted.

[Anonymous]

thanks! will do.

[_NERD]

To StartingOver10 & AhmedInMD:

My agent suggested we come in strong 5k over list price and mentioned more than once that the house needs to appraise for the amount of the offer anyway. If it appraises lower, then a reduced sale price may be possible. Or the seller could turn away our offer and try again with another buyer, which would be silly since it didn't appraise. Oh and my 5k over list offer includes seller paying 5k towards closing. I'm good with that. 

I do, however, live in a seller's market and houses are going into Pending within days of listing. YMMV.

[StartingOver10]

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@_NERD wrote:

To StartingOver10 & AhmedInMD:

My agent suggested we come in strong 5k over list price and mentioned more than once that the house needs to appraise for the amount of the offer anyway. If it appraises lower, then a reduced sale price may be possible. Or the seller could turn away our offer and try again with another buyer, which would be silly since it didn't appraise. Oh and my 5k over list offer includes seller paying 5k towards closing. I'm good with that. 

I do, however, live in a seller's market and houses are going into Pending within days of listing. YMMV.

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^^^Yes, this is the strategy I see often in a seller's market. Good luck with your offer!