Buying a Home Military Style, Pt. 2

Of all the decisions you make when you move in the military, deciding where to live may be the biggest one. Last week I shared the initial steps before you purchase a house and how that might look different for military families.  Today I’m looking at the final steps to home ownership.

Once you’ve found a lender and a real estate agent, the real fun begins.  Touring potential houses is exciting! My friend and real estate agent Kayla Jordan offered great advice as you begin this process.

Always manage your expectations. Remember, this is not HGTV. She says a good rule of thumb is that if you love 80% of the house you can live with the other 20% or change those things later.

Kayla said that some people have Fear of Missing Out (FOMO) and keep waiting for the next house. This is a time sensitive process, though, so you need to make a decision sooner rather than later. Additionally, as of the writing of this article, inventory is low, so there are often multiple offers to compete per home.

Something to consider is that the house might be beautifully staged, but the staging doesn’t come with the house. Again, this isn’t HGTV.

So now you have found THE ONE!

Your realtor will walk you through the offer process. Sometimes there is a counter offer or there are other competing offers. If your offer isn’t accepted, you will keep looking and eventually find your house. If the offer IS accepted, then both parties sign the contract and the inspection process starts.

There are a few different inspections. The whole home inspection is required. Your realtor will tell you what she recommends. We opted for a sewer line inspection since we would be responsible for any repairs needed between the house and the city sewer, that starts at the end of the driveway.  The realtor usually lines up the inspectors. It is possible to do a virtual walk through if you can’t be there.  We did the virtual option. Whether you can be present or not, you will receive a very detailed inspection inventory.

Based on the inspection and anything else that is disclosed there can be addendums to the contract. If there is a big problem like mold or a sinking foundation you might pull out and start the process from scratch. If there are no red flags to keep you from buying the property, but repairs are needed, you can add those to the contract as something to be replaced or compensated for by asking for more closing costs to be covered by the seller.

Be realistic about your level of comfort. The realtor cannot steer you, the buyer, away from a property but will help you tailor the location and kind of home that fits your life style. That being said, if you get the inspection and you find you might have to replace the roof or A/C in the next two years, that might be a reason you want to reconsider if you only plan to be there for four years. On the other hand, knowing every home has expenses, these eventual fixes might be something you can prepare for in advance.

Almost Done

Now you have had the inspections, the lender has done their appraisal and underwriting and everyone has agreed on the terms. It’s time to close!

For a VA loan there is no obligation to have a downpayment, but VA funding fees might be a thing, depending on your lender.  These fees are like mortgage insurance. If your VA loan does have these fees (not all do), they can be rolled into the loan instead of at closing which is often a cost savings to a military family who will sell in three to five years. Kayla recommends setting aside $5,000- $8,000 for closing costs, just to be safe.

If you cannot be in person for the closing, as we weren’t, the lender will secure a notary and you will have a remote or virtual closing. Again, it’s a bit like all that paperwork at the car dealer, except the numbers are bigger and your hand will get a cramp with all the additional papers you will have to sign.

The process is worth it! We have been in our house for nearly two years. We are thankful that we had a realtor who knew the area and all the priorities of military families. We are also thankful for modern technology that allowed us to do so much remotely.

I think the big thing is to be positive and think of the possibilities. There will be time to be realistic and number crunch, but enjoy the process and think of it as a bunch of shopping dates!

If you buy a house:

• Seriously: don’t go it alone! I have heard it said that the rich are rich because they hire experts. Hire your expert and listen to her! This could save you A LOT of money in the long run.
• Dave Ramsey says figure on 25% of your take-home pay for housing expenses. This means you might not fit all your mortgage within your Basic Allowance for Housing (BAH), but if the mortgage payment and utilities sans cable/ internet come to 25% or below of your take-home pay, you should be in good budgetary shape and not feel like you are living paycheck-to-paycheck because of your housing expenses.
• Consider the ages and needs of your kiddos. The one request our teens had was a separate room where they could hang out with friends, away from us. Little ones might need a bigger yard with a fence. If you have babies, you might prioritize a bathtub in the hall bathroom. Different stages of life, often bring different priorities.
• Be realistic about what projects you can handle. We wanted something “move-in-ready” but with some need for updates. We sought out a 1970’s/80’s home for durability and knowing we would probably change some of the design.
• I like Kayla’s 80/20 rule. It’s true – things you thought would bother you if not changed tend to fade into the background. Two-thirds of our house still has popcorn ceilings. If we are here for more than another two years we may make scraping them a priority. Since I don’t stare at my ceilings for long, I’ve learned to forget about them.

Enjoy the process and the dreaming. Get a good realtor and let him or her do the heavy lifting.