VA with no money down getting beat by all cash offers

[Joel Case]

My wife and I are approved for a VA loan to owner occupy a property up to $500k but I am losing out to all cash offers. Work history is over 3 years on my job, 10 on hers for the same doctor, my credit score is a 720 due to ~$7200 no interest credit card debt. Before that debt it was 793. We currently have a home we paid $125k for 5 years ago and have $60k left on our principal with our 30 year mortgage. We have $11k saved in the bank to cover our closing costs, but that is slowly growing every month since we shifted from paying down our current home to saving for the next.

Do you believe it would be possible to get a all cash hard money loan for $300-400k so that I could make an all cash offer or would the LTV require me to bring more for a downpayment?

[Erik Browning]

Hey @Joel Case it's likely not you as they buyer/investor that is the issue, or that you are getting beat by all cash offers - it's the agent representing you. 

Older and more seasoned agents routinely were told that VA loans are not good loans because it requires them to do slightly more work. Specifically, the home has to pass and remedy (if any) active pest infestations. Additionally, these old guard agents don't like that the VA loan has an amendatory clause, which give you the right of pulling out of the deal - a contingency if you will.

There is A TON of misinformation regarding the VA loan, "it's more expensive, there are extra fees, appraisals are more strict." None of this is true. While fees are different than conventional, it is absolutely not more expensive (I'll show a chart below to demonstrate this) and VA loans get the best interest rates, no PMI, and best of all: 0% down payment.

If your agent is not winning you deals, it's because they are doing a bad job at seeking out information that serves the seller's interest. If the seller is only interested in 10 day cash closings - then maybe that home is not the best fit for you. Perhaps find homes where the seller is looking for a rent-back or the highest purchase price. Having an all-cash hard money loan is substantially more expensive and when you go to refinance, your loan will likely be 10's of thousands of dollars more than what the home is worth - don't do it. Get a new agent and have a discussion with them about finding the seller's motivation. THIS POST summarizes a conversation with an agent I had once.

Depending on where you are, I can recommend an agent that is an advocate for veterans and has a successful record of getting vets into homes.

Conventional vs. VA loan chart as promised (pay attention to Cash Required and Gain On Sale rows):