I can not advise what offer to accept, but the VA loan will require the seller to pay some of the closing costs typically associated with the buyer. I would have the buyer's lender spell out in detail which these are and how much. But, either way, it will not be 5% more than the conventional loan fees. The VA loan appraisal is a little more stringent on safety issues and inspection issues. But not too bad.

As far as the loan approvals, my bet is that the VA buyer has had his credentials looked at closer than the conventional buyer. But this is not always so.

Don't forget that the other parts of the offer play a large part too in determining the overall strength of an offer.

If they are using USAA, then plan on a delayed closing at best. At worst, it may fall apart when it goes to underwriting. I'd find out who the lender is for each, and call a couple of real estate agents that do a lot of business where you are and ask their opinion of how good the lenders are about getting deals closed, or if they tend to get turned down when they get to underwriting. (I'm assuming you have preapproval letters for both prospective buyers already. If not, get them before you make a decision.)

Also, look at money down. If the conventional buyer is putting 20% dn, and the VA loan buyer isn't, I would normally say the conventional loan is less likely to fall thru, just due to the stability of the buyer.

why be greedy? A full LIST PRICE offer? I'd be counting my blessings.

Yes, the seller is aware that the house may not appraise for the +5% offer.

My friend went with the +5%/VA offer not necessarily because the extra $$ (although that doesn't hurt) but because the closing/possession date and other terms were the best match for her needs. The buyer was also the first one to see the house, so she felt somewhat obligated to give that some weight in her decision making.

She feels confident about the upcoming inspection but will be most interested in the appraisal results given that the offer is over list.

Thank you for all your input. It's much appreciated!

I think she did good. Even if it doesn't appraise, she is not out anything. Good luck to her.

I work in real estate in a military town where VA loans are the norm. In my experience, VA appraisers are not more nitpicky about repairs than any other appraisers. I've seen a VA appraiser overlook obviously hail damaged roofs and conventional appraisers insist that a negotiated flooring allowance be used (and paid for) prior to closing.

VA and conventional loans have the same chance of falling apart before closing - it's all about the lender and the borrower.

Our buyers had a VA loan and we were required to scrape and repaint and old shed way in the back yard. It was in decent shape for storing wood which is what we did. We were really, irritated beause it would have cost us a lot to pay someone to do it. We had to enlist some help and it took a long time and many sore muscles. Later, at closing the buyer said they were embarrassed because they didn't even care about the shed. We also had to fix something in our electrical box and put in a new fire door at the garage. I think we had to pay some other closing costs that were required too. We really didn't have a choice but to take their offer but I wouldn't want to if i had a better option.

Years ago we sold a house to a VA buyer. The only thing that was different as I recall was that it took longer for the mortgage so I think our closing date was about 60 days out. That's a problem if the sale falls through but in our case it all went smoothly. Good luck to your friend.

I'm back with an update that the VA inspector either wasn't nit-picky at all OR the house is in great shape as the report was very clean. The next step is the appraisal (next week)!

Usually the inspector is chosen by the buyer. The appraiser is the one that is approved to do VA loans, and is the picky one...(as well as often underappraising the home). The appraiser can require that repairs be done prior to closing...

Meant to update before now, sorry. The VA appraiser did not require any repairs AND the appraisal amount matched the contract price (the list + 5%)! Amazingly smooth process from start to finish!!

Cool!!!

Good to hear!