If you’re reading this blog, you are likely waiting for your orders to Hawaii (hopefully your next duty station), or you recently PCS’d here and are beginning to shop for a home. You are among the confident, wise ones that have done your research and learned that Hawaii can be a great place to invest in real estate, or you love the idea of the island lifestyle and may be considering Hawaii as a place to retire.
Either way, congratulations for getting to the point where you know your BAH in Hawaii is among the highest in the nation, and real estate is very high in demand. The biggest factor is our limited inventory of re-sales and the limited amount of homes that can be built on the island.
The purpose of this particular blog is to educate you and empower you. As you know, not all agents are alike, not all sellers are alike, and not all lenders are alike. To ensure your success I would recommend preparing before you start seriously looking at homes.
Unfortunately, there’s some stigma that surrounds the VA loan. The “word on the street” is that VA loans are tougher in a real estate transaction due to the strict, conservative guidelines on the VA appraisals and loan underwriting. There definitely is some truth to this, but it’s not always the case. So you as the buyer need to have the proper expectations set, have experienced representation, and a stellar VA lender.
How to Look Favorable to a Seller
Your agent should present a clean offer on your behalf, not asking for a lot of concessions, and not seeming like you are a demanding buyer. You can offer to waive certain contingencies such as cleaning (there’s different levels) if the home is vacant and in move-in condition. You could also offer to pay for customary seller charges such as condominium documents, but be careful because you can’t pay for any VA Non-Allowables.
What Are VA Non-Allowables?
These are fees that the government does not allow you to pay. Some costs include the termite inspection report, lender document fees, and some notary fees. Historically, buyers would ask the seller to cover these non-allowables; however, since that would mean several thousand dollars off of their profit, sellers often did not want to work with those buyers. Nowadays, it’s very common for VA lending specialists to pick up those fees for the buyer, in order to have a competitive offer. Make sure your lender will cover those fees for you.
Although it’s almost impossible to compete against a cash buyer or someone with a large down payment, you can make it difficult for the seller to ignore your offer. An emotional and compelling cover letter goes a long way, especially if the seller is also in the military and has been in your position once. Also, show them you are financially strong by putting a higher than typical down payment or offering to pay over appraised value if you want the property bad enough.
If you are receiving TLA for 60 days, you will likely get an extension on your allowance if you are in escrow. Plan accordingly and provide your escrow documents to the TLA office once you’re in escrow.
Want to Know More?
I specialize in helping military buyers and sellers. I especially enjoy helping those who serve and defend our nation, because you deserve to own a piece of this country. My husband is an Air Force Academy graduate, so the military is a part of our lives.
Why live on base and give the government back your money? Why rent off base and give the landlord your BAH money? Buying is not for everyone, but it sure makes sense for many, especially if you’re in the military.