No one knows the act of moving like a Military family. Moving around the world simply comes with a servicemember’s job. And, relocation is one of the most exciting aspects of a military career, but also the most challenging. While the military offers great resources to help with a move like base guides and on-base relocation experts. There is nothing better than finding a local expert who understands a military family’s unique challenges and objectives.
When a military family has been given Permanent Change of Station (PCS) orders, they’re not actually ‘permanent’ orders at all. In most cases, a PCS order will relocate a servicemember for a number of years but not the remainder of a career. This truth creates a special need, when it comes to purchasing a home, as a future move and sale is likely and must be considered.
New Construction Challenges
Many military buyers have interest in new construction. These are great options in all instances but one – the future sale. If a buyer is active duty military who may face another PCS (permanent change of station), new construction may not be the wisest choice. The upside to new construction often includes the builder paying all or most of a buyer’s closing costs – when a homeowner seeks to sell in a neighborhood where new construction is being built, they must compete with the pricing and seller concessions offered by a builder. Thereby drastically impacting the veterans ability to compete and sell.
Keeping the Home as an Investment Property
Another item to consider is the option to keep a home as an investment if and when another PCS is on the table. Yes, a VA Loan, when established, is for owner-occupied properties only. But after the home has been utilized as a homestead, a veteran can retain it as an investment property when they move. A Veterans entitlement is attached to the VA Loan and the option to purchase a second home with a VA Loan is based entirely on the servicemember’s remaining entitlement. According to an article published by the VA Home Loan Centers;
“Military members are allotted two forms of entitlement, basic and bonus. The basic entitlement amount is $36,000 while the bonus entitlement is for $144,000; it is permissible to use both entitlements in connection with each other. Essentially, if the previous home purchase did not drain the borrower of the entirety of their entitlement, they may use the remainder for a second home purchase.”
Many savvy veterans have purchased homes in every duty station, building an impressive investment portfolio. As each property is sold, entitlement is renewed.
Choosing the Right Neighborhood
Information runs like water on the internet and buyers, nowadays, are armed with more information than they could possibly need. But still, the need for a local expert remains. A local military real estate expert will look beyond the immediate ‘sale’ and help to position their client in the best possible way for a likely future move. Things to consider are:
- What will the future competition be when it is time to sell?
- What is the percentage of owners vs. renters in a particular neighborhood?
- Is yard maintenance included so we don’t have to worry about a future tenant maintaining the yard?
- How will a neighborhood’s CDD and HOA fees impact my ability to rent and break-even or make a profit?
- Where is the future growth of the area?
The VA Loan
The workings of a VA Loan are somewhat unique as well. It is important that a relocating servicemember have a seasoned and experienced military real estate expert who understands what VA loan requirements are for the Veteran AND the home. With a VA Loan, the Veteran must meet certain guidelines and so should the house. An experienced military real estate expert can identify issues a home may have that could impact the appraisal requirements. This is important because time, energy, and money can be wasted if certain observations are not made prior to contract.
VA Loan Options
There are also several unique features of a VA Loan that not all Agents may know about. There are, of course, the standard features but, what about VA Energy Efficiency Loans and VA Renovation Loans? If a Veteran seeks a military real estate professional, they can expect to learn of features and programs they may not have otherwise found.
Don’t be Fooled
There are some lending institutions who provide ‘recommended’ agents to assist their Veteran clients. Sometimes, these Agents don’t actually have extensive VA loan experience at all, they have simply agreed to pay the institution a referral fee. When a servicemember or veteran is interviewing real estate professionals, they should include the following questions to determine an Agent’s knowledge of VA loan programs and military relocation:
- How many of your Clients have utilized a VA loan to purchase a home?
- What can you tell me about the VA loan Appraisal process?
- Is there anything special I will need to do if I buy a home with a well as its water source?
- As a Veteran, do I have any closing costs to pay?
- What happens if there is a problem with the appraisal on the home I purchase?
- Must a home have all of the appliances included to qualify for a VA loan?
- I have VA Disability, how does that impact my home purchase?
Hedstrom & Stamm Home Solutions – Your Military Real Estate Experts
Hedstrom & Stamm specialize in real estate services for military servicemembers and Veterans. Toni Hedstrom was originally licensed in 2002 in Killeen, Texas – the home of Fort Hood! Throughout her career, Toni has helped thousands of military members and their families purchase and sell homes. And, while Toni continues to learn every day, there aren’t many questions about VA loans and military relocation she can’t answer. Toni’s Husband retired from the US Army in 2008 after 20-years of service so she has experienced the military move both professionally and personally. Selena Stamm, of Hedstrom & Stamm, has earned her PCS Badge as well. Selena’s Husband is currently Active Duty Marine and is currently deployed (at the time of this publication).
Hedstrom & Stamm offer no hassle consultations for any service member, family member, or veteran. The team will gladly answer any questions about VA loans, VA home purchases and how to manage the future sale when a PCS is ordered. To schedule your consultation, simply fill out this form and a member of the team will be in contact.