5 ways to screw up your VA home purchasePosted by Brett Tousley on Tuesday, May 10th, 2011 at 4:17pm.
As our home office is located within 10 minutes of Joint Base Lewisand our website ranks very well for targeted military related keywords, we work with a lot of active duty and retired military clients. I've always been a bit of an over achieving patriot I guess. When I originally started my career in real estate, I wanted to make sure I was in a position to help as many military members and their as possible.
All one has to do is look at the typical businesses that pop up around military bases around the country to understand that many business owners view military members as "cash cows" that are easily taken advantage of. How many car dealerships, rent to own rim shops and pay day lenders are located within a mile of your current bases' main gate? Get the picture?
Over the years, I've help a lot of military families avoid the potential pitfalls of buying or selling a home. During that time I've learned a lot about protecting the average military buyer from the hazards of buying or selling a home and a lot about protecting the VA home buyer from themselves. I thought I'd share with you the top 5 ways VA buyers sabotage their dreams of owning a home while stationed at Joint Base Lewis.
1. Failure to getapproved for a home loan
Yes, it's true the number one hurdle on the path to home ownership is securingapproval for a VA loan. You'd be surprised at how many folks learn that they have a few black marks on their credit report that can be easily removed. You'll need time to remove those black marks from your report, trying to do that while attempting to buy a home is most often a case of "too little too late".
2. Failure to understand the VA loan process
Unfortunately, many active and retired service members don't really understand how their VA mortgage benefit works. The VA does not actually loan you the money for your home. They GUARANTEE the people who do loan you the money that you will repay the mortgage. That is an important distinction. Every month I speak with potential VA buyers who misunderstand the process and believe they are qualified for a mortgage up to $500,000. in Pierce County. To determine what you really qualify for, you'll need tothe first bullet point of this blog.
3. Falling for the online "VA LENDER WEBSITES"
The Internet is very similar to the real world when it comes to doing business. Just like the rent to own tire rim shops setting up business outside your main gate, many lenders follow the same business philosophy. If you google "VA" or "VA Lenders" you'll find a vast number of websites that claim to be VA loan specialists. These sites are either set up to look like a .mil site or have the appropriate number of US Flags, Army Stars etc. and official sounding to convince you they are somehow affiliated with the military or VA. In my opinion, these lenders are no better than the rent to own tire companies that set up shop outside the main gate of your current base. I know that you'll find using a local direct endorsed VA lender who you or I can put eyeballs on will provide you better rates and service than any of the online "Military specialists".
4. Failure to plan ahead
To help you the best way possible, I need to know when you plan to buy a home. This is best done a month or more before your arrival. It never ceases to amaze me when a potential client calls me up on a Sunday morning and tells me they need a home asap. Depending on your lender, your escrow time will be 30-45 days. Escrow time is defined as the time starting from the day we have a successful contract negotiated until the day you own and can move into your new home. Every year I have several service members who call me at the last minute and expect to be in a home within the week. That's great if you are renting a home, but when you plan to buy a home, it just doesn't work that way folks.
5. Buying a home without your own REALTOR
This most often occurs when someone doesn't plan ahead and shows up to a new home builder's site expecting to buy a home that day. Here's a news flash for you do it. The friendly agent working at the builder's model home works for the builder. Even if they claim to be a buyer's agent, they are deriving their income by selling that builder's homes. You are not going to "save the commission" by trying to buy on your own. Repeat...You are not going to "save the commission" by buying without your own REALTOR.
I'm reminded of a time many years ago when I was sitting with a client in a builder's model home. We were negotiating exactly how many upgrades we would be getting from the builder when a uniformed officer walked into the model home. Once greeted by the builder's agent, he stated "I need to buy a home today, what do you have for under $300,000?"
I almost fell out of my chair.
That officer may have bought a home that day, but I guarantee you he was taken for a ride.
The twinkle in the builder agent's eye told me everything I needed to know that day.
There's a real simple way to avoid these pitfalls. Hire an experienced REALTOR who represents your best interests only. Think about the motivation of the two parties, the builders agent's only get paid if you buy one of the builder's homes. Anbuyer broker will be paid no matter what home you choose to buy. Hiring a buyer's broker gives you access to the entire NWMLS, not just the builder's available inventory. And of course that pay does not come out of your pocket, it's paid by the seller.
If you are planning on buying a home near Joint Base Lewis, do yourself a favor and secure the representation of a good experienced buyers broker who can help you avoid the 5 most common pitfalls to VA home ownership.
Brett Tousley is the designated broker and owner of NW Home Brokers. He can be reached at 253-820-2745 or firstname.lastname@example.org
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