Military life comes with many challenges, and one big one is having to relocate frequently. After receiving a Permanent Change of Station (PCS) order, you might feel pressure to sell your house as quickly as possible so that your relocation can go smoothly.
Fortunately, there are many programs and services to help military members transition smoothly. We’ll walk you through five options to pull off a successful sale, regardless of where you stand on your mortgage.
Check your equity to get started
As a military member selling a house, the options available to you depend on your equity, the percent of your home that you own outright. Essentially, equity is the market value of your property minus the amount of money you still owe on your mortgage loan. Real estate professionals recommend that you own at least 10% of your home outright before selling. This minimum equity ensures that you’ll have the funds for necessary home sale expenses (such as staging, repairs, and closing costs), plus some leftover profit to put towards your next down payment or security deposit.
To determine your home equity, you first need to assess your property’s fair market. For a quick estimate, check out HomeLight’s Home Value Estimator. Our tool uses an automated valuation model to give you a ballpark figure for what your home is worth in the current market.
For the fastest sale possible, sell your home to a direct buyer
If you need a lightning-fast sale, consider selling your home for cash to a direct buyer. Direct buyers are companies or individuals that purchase your house for cash in a matter of days or weeks, opposed to the months it typically takes to sell a home on the market. When you sell for cash, you bypass time-consuming home sale tasks such as light remodeling, staging, open houses, and showings — not to mention waiting on a buyer’s mortgage approval.
Additionally, your home sale is less likely to fall through when you sell to a direct buyer. If you sell to a traditional homebuyer, their offer will most likely include contingencies — clauses in purchase agreements that allow a buyer to back out of the deal. For instance, your sale might be contingent on your buyer’s home sale; if they can’t sell their home, they can back out of buying yours. According to the National Association of Realtors (NAR), contingencies account for more than 7% of failed home sale transactions.
If you’re interested in finding a cash buyer, save time comparing hundreds of companies with HomeLight’s Simple Sale. All you need to do is provide information about your property, and Simple Sale will gather offers from our extensive network of cash buyers. We’ll show you the best offer next to what you could make if you sold your home on the market with a top real estate agent. That way, whatever route you take, you know you’re making an informed decision.
For the best sale price, list with a Military Relocation Professional
Selling on the market is the way to go if a top sale price is your main priority. For a smooth sale, partner with a real estate agent who has significant experience selling homes for military personnel. These real estate agents understand the unique challenges of a PCS order, and can help you make the most of benefits and programs available to service members.
A sure-fire way to know that an agent is qualified to handle a military home sale is to see if they have a Military Relocation Professional certification. This certification is available to real estate agents registered with NAR who have completed specific training on military home sales.
Still, you shouldn’t just pick any agent with an MRP certification. The quality of your real estate agent significantly impacts on your home sale. Our research shows that the top 5% of real estate agents sell homes faster and for more money than the rest. Furthermore, Kelly Hollowell, a leading real estate agent in Chesapeake, VA, points out that “it’s critical for military members to prepare their home sale with a professional that can help orchestrate all of the details, and that comes with experience.”
To start your search for the perfect agent, plug your home details into HomeLight’s Agent Finder and let your concierges know that you’re looking for an MRP-certified agent. We’ll connect you with the top three agents that match your needs.
Use your VA-backed mortgage as a marketing tool
With the 1944 GI Bill, the government launched Veteran Affairs (VA) loans to help service members and veterans become homeowners. VA loans have interest rates that are significantly lower than the national average, require no minimum down payment, and are free of prepayment penalties.
If you purchased your home with a VA loan, VA loans are “assumable.” That means you might be able to transfer your loan terms to another prospective buyer so long as they meet your current lender’s eligibility requirements. With a VA home loan assumption, the buyer takes over your mortgage, including your loan balance, your interest rate, and your monthly mortgage payment.
A VA loan assumption may be an attractive option for buyers if interest rates are significantly higher at the time of sale than they were when you secured your VA loan. Hollowell emphasizes, “if a buyer can assume a VA loan because they meet the criteria, that’s fabulous because they’ll have a much lower monthly mortgage payment than with a new loan.”
Another benefit of VA loan assumption is lower closing fees. In a traditional home sale, the seller pays 6% to 10% of the sale price in closing fees, while the buyer pays 2% to 5%. With a VA loan assumption, the buyer only pays a 0.5% VA funding fee and any closing or title fees that may be buyer-paid, depending on the location of the property.
Eligible individuals include:
- Honorably discharged veterans
- Active duty service members in good standing
- Surviving spouses of deceased service members
- National Guard and reserve members with at least six years of service
When you transfer your VA loan, request a release of liability from your lender or servicer to transfer liability for payments to the buyer. If you don’t complete this form, your buyer could damage your credit if they make late payments or default on the mortgage.
If you’re underwater on your mortgage, take advantage of FHFA Short Sale Assistance
The Federal Housing Finance Agency’s Short Sale Assistance program helps military members with an underwater mortgage sell their home. You’re underwater on your mortgage if the amount you owe on your home loan is higher than the fair market value of your property.
In 2012, the Federal Housing Administration announced new guidelines for mortgage giants Freddie Mac and Fannie Mae to help military members with a verified PCS order. Under the new guidelines, these lenders cannot “pursue a deficiency judgment or any cash contribution or promissory note from members of the military with a change in duty station for any property purchased on or before June 30, 2012.”
Additionally, these lenders must approve eligible military members with a PCS order for a short sale immediately, even if they are current on their existing mortgage. Service members are also exempt from deficiency judgments when receiving permission for a short sale and are “relieved of any request or requirement for a cash contribution or promissory note so long as the property was purchased on or before June 30, 2012.”
Home selling assistance is out there for military members
At the end of the day, there’s a long list of options to speed up a military home sale. If you have any questions about programs you may be eligible for, reach out to a real estate agent with extensive experience helping service members move. They can help you understand your options and direct you to other valuable resources.
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