VA Veterans Selling home & funding fees?

[paulstrgn]

Your realtor may only charge 1% but most homes are sold by another realtor who will want their 3% (3% for sailing realtor and 3% for buyers realtor) so unless your realtor sales the house with no other realtor then you will pay at least 4%. When I bought my current house I paid for the title insurance not the seller. 

I would ask your realtor for a breakdown of all fees. Keep in mind a lot of the fees will depend on what you sell the house for.

[paulstrgn]

Buck her is a link that gives a breakdown of cost when you sell a house. They say in addition to realtor fees the seller pays between 1% - 3% for closing costs.

https://www.opendoor.com/w/blog/how-much-are-closing-costs-for-seller#what-are-closing-costs

I hope this helps.

[broncovet]

By "building in" the funding fee, then offering to pay the buyers funding fee, it often means you can land a buyer that you could not have other wise.  

Example:

    Your home is for sale for 275000.  A typical VA funding fee is 2.15%.  That is $5912.  Lets say someone is looking to buy a home.  Mostly, lower down payment is better than higher down payment.  If your buyer does not HAVE an extra $5900, then they will sometimes choose to buy a home where the seller offers to pay all/part of the closing costs which can include the funding fee.  

     From the buyers perspective, your house, where the seller pays the 5900 dollars would mean they could "buy it", where they may NOT be able to buy a similar home where the funding fee is not paid by the seller.  

     The net result is you are helping your buyer buy the home, handing him 5900 for the down payment.  This is a strong incentive for the buyer.  Its better than reducing the price 5900, because that would be paid over time in payments, and buyers are mostly concerned with how much they have to put down payment.  

More here:

What Is the VA Funding Fee?

VA loans include a fee charged to most borrowers called the VA funding fee. This fee gets sent directly to the Department of Veterans Affairs. Funding fees help the VA cover lenders’ losses. If a borrower defaults, the VA can step in and pay off a portion of the loan. The fees also provide the VA with funding that it can put toward other costs. And they ensure that the VA can help future borrowers purchase homes.

There’s more than one way to pay the VA funding fee. You could pay it up front in cash. You could also choose to roll the fee into your loan and pay it off over time. Just note that adding the fee to your loan balance will increase your monthly payments.

How Much Does the VA Funding Fee Cost?

How much you’re required to pay in funding fees will depend on a few factors, including your military status. While VA loans usually don’t require a down payment, putting a small percentage down can reduce the cost of your funding fee. The VA will also look at whether you’ve had a VA loan or you’ve refinanced in the past.

The VA funding fee is expressed as a percentage of the loan amount. For regular military borrowers with no down payment, the funding fee is 2.15%. The fee increases to 3.3% for borrowers with previous VA loans. For those with a down payment of 5% to 9%, the funding fee is 1.5%. Any loans with a down payment of 10% or higher will include a funding fee of 1.25%.

[Buck52]

Thanks for the link paul and a better understanding on the funding fee for the seller.

  your right about  if another realtor sells the home and not my realtor,  they will definitely want their take of the commission, so if my realtor is NOT the one that ends up selling the house   she gets her 1 % or whatever she gets and the other realtor that actually shows the home and ends up selling to this new buyer   then that's why all these (in part) funding fees. eh!

So actually it cost the seller to sale and the buyer gets a better deal   especially if they use a VA Loan.

I read some where   where the Veteran is not charge certain funding fees if he is active duty or a disable vet getting monthly compensation from the VA  BUT obviously this may be just when  a Veteran is the Buyer and not the Seller?

And maybe my realtor may have said what she said about only charging us a small %  because she probably knows she won't be the one that sells it...

so for its been other realtors that bring people out to look at the house  my realtor as yet to show our house.

Oh well if we have to pay out of pocket I guess its worth it in the long  being were going to down size  get a smaller home with no H.O.A...And our payments will be considerably less, so that means we can save and save back the $$ we took to sell the home.

We probably could sell this house tomorrow if we paid the closing cost for the buyer    We think that's what the hold up is   its hard to pay 20%down on 275.000    so were hoping a Veteran buys it and use the VA loan   then we can pay what ever we need to pay.

Only thing is with all these funding fees we have to pay and then pay the buyers closing cost   we  would have to Rob Ft Knox   eh!!!!

So maybe this realtor is correct about these funding fees at closing? she just didn't tell us about another realtor who actually sells the house who gets the other 4-6%commission and then add her 1% commission in.

Oh well I have a better understanding of it now   we will just have to pay these funding fees , and I will get a list of everything were going to have to pay before we close   and if there is some fees on this list I have in question  then I ask my realtor about them and ask if they can be withdrawn/eliminated. 

Thanks Paul and broncovet  I appreciate your time here.

[paulstrgn]

25 minutes ago, Buck52 said:

she just didn't tell us about another realtor who actually sells the house who gets the other 4-6%commission and then add her 1% commission in.

The realtor who sells the house if other than your realtor will only get 3% and no more.

 

26 minutes ago, Buck52 said:

its hard to pay 20%down on 275.000

The way buyers get around the 20% down is they can actually take a second loan out for the 20% for the down payment. So in reality they will have two loans against the house, the big one for 30 years and the smaller one for 10 years.

Bronco has a good suggestion about building in an incentive for the buyer. If your house would appraise for $285,000 you could actually offer the buyer $10,000 towards closing costs. In reality they are paying it themselves but it looks like you are helping them.

On the house I am currently in I used VA for the second time but because of my disability being over 30% I was not charged a lot of the VA loan origination fee when you use VA the second time.

I wish you luck on selling your house, I know I will be going through that next year when we sell and move to another state.

[Buck52]

Roger That Paul

I think I have a better understanding of all that now...its not as bad as I had figured.but zip on the bottom line  and then may have some out of pocket at closing if we don't meet the funding fees and commission fees added in at closing but that should be fairly Minimal   Maybe 500/1500 more at closing.

so we expect to bring more $$ to the table at closing.

Oh btw the Home only appraised at 268.000 2 years ago.