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VA Loan Purchase Agreement

The VA offers veterans many benefits that help them throughout their lifetime. One of those valuable benefits is the VA Home Loan Guarantee Program.

Published on January 7, 2021

The VA loan is arguably one of the best options for Veterans and military members.

Through the VA loan, Veterans can purchase a home with no money down and have an easier time getting the loan because the VA guarantees a portion of the mortgage.

For Veterans who are considering using the VA loan to purchase a home, it is essential to understand the details of agreeing to buy a home and what that means legally for you.

What is a VA Purchase Agreement?

When you agree to purchase a home, you sign a contract of sale or purchase agreement. The purchase agreement is a legally binding contract stipulating the home purchase terms between the buyer and seller.

When buyers sign these forms, they usually put earnest money or a deposit down on the home to show that they are entering into this agreement in good faith and intend to purchase the home.

If you put a deposit down on the home, make sure the paperwork outlines the terms in which your deposit is refundable. Typically with a VA purchase, a clause for a low appraisal is included.

Doing so will ensure that if there is a problem with your financing or the seller or builder does not live up to their end of your agreement, you will have protection.

VA Purchase Agreement Checklist

When you purchase a home, there are many things you must look for to make sure the sale goes smoothly and you protect your interests.

Every purchase transaction is different, so not all agreements may look the same. However, below is a checklist of common topics often included in the VA purchase agreement and things to consider.

Working with an experienced VA lender helps provide peace of mind when signing a VA purchase agreement. Let connect you with an experienced VA lender today.

  • At the very minimum, the purchase agreement should include the terms of the sale, including the buyer and seller information, property details, price, and financing information.
  • A useful inclusion is contingencies that must happen for the sale to go through. These often include a contingency for the home inspection, obtaining financing, and selling a current home. A VA appraisal contingency is required for VA financing.
  • There are many closing costs involved in purchasing a home, so be sure there is a breakdown in the agreement to stipulate who will pay which costs.
  • State who is responsible for the property when the contract is signed until the seller has vacated and the new owner occupies the property. Usually, the seller or builder is responsible for the property until the title is transferred, but make sure it states who the responsible party is in the contract.
  • If there is a clause in the contract that says that the seller or builder can back out if they want, make sure that there is the same clause for the buyer. If they get the choice of backing out, you should get this choice as well. Otherwise, it gives one party the upper hand in the sale.
  • If you are building a new home, the contract should state the completion date and that the home will be built according to the specified plans. You should also list any builder's warranty information and time limits.
  • Include any additional items the seller includes that are not part of the structure. This typically refers to appliances, light fixtures, and items not part of the permanent structure of the home.

VA purchase agreements shouldn't be daunting. However, it's a great idea to have an experienced VA lender on your side to walk you through the process. Let connect you with an experienced VA lender today.

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