VA loans are just as likely to succeed with REO as any other conventional loan, they just take a bit more work and preparation. They can also be competitive, but the competition is fierce for well-priced homes. That may change some over the next few months, since we expect the available inventory to increase. Since February the national foreclosure moratorium clogged things up, but that’s started to loosen. So, patience and persistence will pay off. Hang in there.
With a VA loan, try to get a termite report in advance. The idea is to structure your offer to allow some buyer money to pay for repairs. If you know what the cost will be, you can ask the seller for a specific credit for VA required repairs in your offer, say in lieu of a credit for closing costs, then add the amount to your offer price. Most REO sellers will consider this an attractive offset. If you include the report and the Section I estimate, it would be a compelling offer. Sometimes the listing agent will have a report already, if not call in some favors and get your own. Of course this could get spendy if you have to do it over and again. Keep an extra watch for listings that are seasoned for 60 days or more because there will be less competition, but your VA offer should stand well among multiple offers. Seller will almost always ask multiples for a ‘final highest and best’ counter offer, so you might get a second shot at the price.