How a First-Time Buyer Can Purchase a For-Sale-By-Owner Home With a VA Loan

Justin is a veteran and a first-time buyer. He is a fictional character, but his situation comes up often. He spots a yard sign that reads "For Sale By Owner," loves the house, and then stops. Everyone has told him you need a realtor to buy a home, and he assumes that goes double for a VA loan. So he almost walks away.

He shouldn't. A VA loan does not require a realtor. What it requires is that the steps happen in the right order, and when there is no agent, you are the one who makes sure they do.

Does a VA loan require a real estate agent?

No. The VA sets rules for the loan, the property and the appraisal. It does not require either side of the sale to have an agent. A for-sale-by-owner purchase can work with VA financing as long as the contract, the property and the paperwork meet VA standards.

Step 1: Get eligible and preapproved before you call the owner

Start with your Certificate of Eligibility, which shows the VA that you qualify for the benefit. Then get a full preapproval. Justin does this before he ever contacts the owner. It tells him what he can comfortably borrow, and it shows a by-owner seller that he is a serious buyer who can actually close.

Step 2: Put the deal in a written contract with the VA clause

With no agent, there is no standard form handed to you. Make sure the agreement is in writing and includes the VA clause. In plain terms, it says that if the VA appraisal comes in below the purchase price, you are not forced to complete the purchase or lose your deposit. That clause is one of the best protections a VA buyer has. Because by-owner sellers are sometimes nervous about VA loans, explain this early and calmly. It is a standard part of the process.

Step 3: Plan for the VA appraisal and your own inspection

The VA assigns the appraiser, and the home must meet VA minimum property requirements. That means the home needs to be safe, structurally sound and sanitary. Depending on the property and the area, other inspections, such as a pest inspection, may also come into play.

Here is the part people miss: the VA appraisal is not a home inspection. It estimates value and checks minimum standards. Justin hires his own inspector so he knows what he is actually buying. VA also places limits on what a seller can contribute toward a buyer's costs, so talk those through before you negotiate.

Step 4: Do the work an agent would normally coordinate

An agent usually keeps the calendar, the disclosures and the communication moving. Without one, you take that on. Justin makes a simple checklist:

- Ask the owner for written disclosures about the home's condition.
- Research recent nearby sales so he is not relying only on the owner's asking price.
- Keep deadlines for the appraisal, inspection and closing in one place.
- Send everything the lender asks for quickly.

What changes in South Carolina

In South Carolina, a real estate attorney handles the closing. When you buy by owner, line that attorney up early, because they are often the person who helps make sure the title is clear and the paperwork is in order. Details can vary from state to state, so if you are buying somewhere other than the Charleston area, ask before you assume.

What to do today

If you are a veteran or active duty service member looking at a by-owner home, do one thing first: get preapproved and confirm your Certificate of Eligibility. Everything else builds on that.

Buying without a realtor is not a shortcut, and it is not a barrier either. It is a path with clear steps. If you want help mapping it out, call me, Jason Sharon, at 843-LOW-RATE. I find the path.

Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.