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Selling to a VA Home Buyer

Selling to a VA Home Buyer

If you’re selling your home, it’s time to get familiar with the VA home loan — yes, even if you aren’t military yourself. Here’s why. Veterans or active duty military homebuyers are likely to use the VA loan when purchasing a home.

 

What you’ll learn in this article:
  • What is the VA loan?
  • Preparing Your Home to Sell
  • Research Housing Rates for Your Area
  • Market to Military
  • Meeting VA Requirements
  • The VA Home Inspection

What is the VA loan?

For those of you unfamiliar with it, the VA helps those who are eligible purchase a home at a competitive interest rate, often without requiring a down payment or private mortgage insurance. That means that they not only offer zero down payment loans, but also have lower credit requirements than alternative financing options.

As you can imagine (or have used yourself), the VA loan is a popular choice. So if you’re near a military installation, the likelihood of your potential buyers using this lending option skyrockets. Don’t be mistaken, while there are duty stations tucked away on their own, there are plenty positioned in the heart of major cities that you might not even realize. The point? Thorough research can help you to consider all aspects of the buyers in your area. As a home seller in a heavily dominated market, consider getting to know the lending terms of the VA loan and how to market to VA home loan buyers.

Preparing Your Home to Sell to a VA Home Loan Buyer

There are a couple of key things to know about selling your home to a VA home loan buyer.

“One is that there isn’t a safer bet to close on the market. VA loans have had a higher average closing success rate than conventional loans over the last five years. The other piece is that sellers are not required to pay any costs on behalf of a VA buyer. There’s a misconception that sellers have to pay a VA buyer’s closing costs or are on the hook for repairs if the VA appraisal turns up issues. This isn’t a zero-sum situation, and both are matters of negotiation between buyer and seller.”  — Chris Birk, Director of Education for Veterans United Home Loans and the author of The Book on VA Loans: An Essential Guide to Maximizing Your Home Loan Benefits.

Research the Local Housing Rates for Your Area

Here’s an interesting fact: you can look up how much military servicemembers and their families are allotted each month for housing. It’s called the Basic Housing Allowance (BAH). While it isn’t a perfect representation of each family’s personal budget, it does provide a decent baseline to understand where your property falls into the mix.

How?

  • Use the Department of Defense’s Basic Housing Allowance calculator to learn how much service members in your area are paid each month.
  • Enter your zip code and a pay grade. Unless you live close to the Pentagon, you’ll be better served by estimating housing rates on low to mid-level pay grades, such as an O3 or E5.

Estimate the mortgage payment for your property. 

Using a mortgage calculator, such as MortgageCalculator.org or Bankrate’s mortgage calculator, you can input your asking price, property tax, and estimated homeowner’s insurance. Consider adding two to three percent to your asking price to account for the VA funding fee for first- or second-time VA homebuyers.

Do the math.

Given the BAH for the local area and the cost of your home, will military homebuyers in your area be able to afford the monthly mortgage payment for a zero down payment VA loan? If your home sale price fits the military homebuyer’s budget, then great! It’s time to market to the military community. If not, homebuyers have the option to purchase your home with an alternative loan product—like state down payment assistance programs and FHA loans. However, for those who qualify, the terms of the VA loan are hard to beat.

If you’re in a tough selling market, consider working with your real estate agent to target homebuyers who may be eligible for these products.

Market to Military 

When you market to military homebuyers, you’re working with a unique clientele who, unlike any other homebuyer, operate on a time crunch.

Since military families receive PCS orders for an average of three years, they don’t have the luxury to take weeks or months to find a home to buy. Instead, many families find a home within just a few days.

Knowing this about the military home buying market will help you understand why it’s critical to have great photos, a detailed description of your property’s layout, and a video home tour. Each of these marketing tools will help ensure that you make it onto your military homebuyer’s shortlist of potential homes.

The Logistics: Meeting the Requirements of the VA

The process takes longer when you sell to someone who is using a VA Home Loan than that of most other mortgages. 

One way to expedite this process is to make sure that there aren’t any repair issues with your home that may cause either delays for repair or an outright rejection of your home. While the home buyer is required to pay for the inspection and appraisal, it’s not a bad idea to conduct your own pre-inspection with the intent to get your house ready to sell quickly.

For a few hundred dollars, you can mitigate this situation by hiring an inspector who is familiar with VA requirements. Consider it money well spent, as the VA loan follows a set of Minimum Property Requirements (MPRs) set to ensure that the property is safe, sanitary, and habitable.

VA Home Appraisal 

“The appraisal process looks a bit different. Beyond the typical home valuation, the VA also considers broad property condition requirements. These Minimum Property Requirements are rooted ensuring Veterans are purchasing homes that are safe, sound, and sanitary. This assessment isn’t as in-depth as a home inspection, and any issues raised by the appraiser can be addressed in order to keep the deal moving forward.” — Chris Birk

Common things evaluated by the home appraiser: 
  • Heating and electricity. If the home has a wood-burning stove, is there a backup system?
  • Water. Does the home have a water heater and access to drinking water and a working septic?
  • The roof. Does the roof have a substantial amount of life left? Are there any leaks?
  • Access. Can you reach the property by foot or car by way a private or public road year-round?
  • Defects and deterioration. Is the home free of defects to include poor construction, or wood-eating insects like termites?
  • Paint. Is there any lead-based paint that’s chipping or peeling that needs repaired?
  • The location. Is the home located on a gas or petroleum pipeline or near high-voltage electric lines?

Tips for finding a home inspector: 

  • Get recommendations. You can’t be expected to know the local professionals when you’re new to the area. Check with your real estate agent, loan officer, or experienced friends who can point you in toward a respected home inspector.
  • Look within reputable organizations. Organizations like the American Society of Home Inspectors and the National Association of Home Inspectors require certifications for membership. Finding a local who belongs to one of these groups assures a high standard of service.
  • Know your state laws. Licensing requirements vary from state to state. If you’re unsure of yours, ask your real estate agent and make sure your home inspector meets the criteria.
  • Ask for a sample inspection report. Nothing is better to determine the quality of someone’s work than viewing a sample of their job. This can tell you a lot about an inspector’s level of experience. You’re looking to make sure the report is clear and that it includes images of any identified issues around the property. You’ll also want to see recommendations made for potential homebuyers.
  • Consider your budget. Home inspections aren’t free. The cost can vary depending on the provider, the size of the home, and location. However, they most often fall within $300 to $500.

VA Home Inspection 

Things the home inspector looks for: 

  • Structure. What’s the condition of the property’s construction (walls, floors, foundation, roof, and ceilings)?
  • Exterior.  How much life is left in the current siding, windows and trim? Looking at other features– how’s the exterior lighting and fences? Is there proper drainage based on grade and elevation?
  • Plumbing. What are the pipes made of? Is everything up to current standards to include the toilets, showers, sinks, faucets?
  • Systems. Are the chimney, fireplace, water heater, furnace, A/C unit, and septic system all in good working condition?
  • Roof and attic. Is the framing sound? Is there proper insulation and ventilation?
  • Electrical. Is the electrical wiring properly grounded?  Are all the light fixtures and the main electrical breaker safe and working correctly?
  • Appliances. What’s the condition of the appliances like the dishwasher, range, built-in microwave, garbage disposal, smoke detector, and any other relevant small appliances in the home?

At the end of the day, remember that VA home loan buyers want the same thing as everybody else: location, good schools, and more. The basics to preparing your home to sell for a VA home loan buyer are the same as most others; it’s simply a few particulars that keep you on your toes.

By Danielle Keech

https://www.militarybyowner.com/resources/selling-to-a-va-home-loan-buyer/

 

Johnson’s Sierra Lifestyle Team is experienced in working with VA buyers and sellers. We are here to guide you through the process.

J

How To Monitor Your Credit

How To Monitor Your Credit

 

Way too many of us have a story about our credit card getting hacked or about being a victim of one of the massive data breaches in recent years. As technology becomes more and more a part of our financial lives, it becomes increasingly important to keep a close eye on our personal credit.

By monitoring your credit score and credit report, you can make sure you know if someone has opened unauthorized accounts in your name.

Monitoring your credit has the added bonus of helping you make sure your credit rating is where you need it to be.

The Easiest Ways To Monitor Your Credit

To put this task in “set it and forget it” mode, you should set up an account with at least one website designed to monitor your credit. (If you’ve frozen your credit, you’ll need to unfreeze it with at least one credit bureau first.)

Monitoring Your Credit With Credit Karma and Credit Sesame

When we talk about monitoring your credit, we’re talking about keeping an eye on both your credit reports and your credit scores.

Credit reports include all the details on your credit accounts, both current and closed. The reports track payments and other information for every loan, credit card and line of credit you have. 

Your credit scores are numbers based on that credit history and activity.

If you have any credit history at all, the “big three” credit bureaus — TransUnionExperian and Equifax — will each have both a credit report and a credit score associated with your accounts. The good news is that you can access all of this information for free online.

Credit Karma

Money expert Clark Howard’s favorite site for monitoring your credit is Credit Karma. This site lets you keep tabs on your credit score and view credit reports for free. Once you set up your account, you’ll get:

  • Your estimated credit scores from TransUnion and Equifax
  • Access to your credit reports from TransUnion and Equifax
  • The option to get an alert when your credit score changes or something is added to your credit report (credit monitoring)
  • Additional services including identity monitoring, free tax filing, and access to your auto insurance score

Again, you will need to set up your Credit Karma account before you freeze your credit, or you’ll need to unfreeze your credit in order to sign up.

Read more about signing up for Credit Karma here.

Credit Sesame

Credit Sesame is a site similar to Credit Karma but doesn’t offer quite as many services. It’s also largely free and signing up gets you:

  • Your estimated credit score from TransUnion
  • The option to get alerts when your credit score changes or something is added to your credit report (credit monitoring)
  • Additional services such as identity protection and limited identity theft insurance

Unlike Credit Karma, Credit Sesame does not give you free access to any of your credit reports.

Read more about signing up for Credit Sesame here.

Other Ways To Monitor Your Credit

You may have noticed that neither Credit Karma nor Credit Sesame gives you access to your Experian credit report and score. But you can get your reports for free directly from both Experian and Equifax by creating online accounts with them (Experian also includes your credit score):

TransUnion does not currently provide free access to your credit report.

However, by law, you are entitled to one free copy of your credit report per year from each of the bureaus. AnnualCreditReport.com is the only place authorized by the federal government to give you access to all three at once.

Read more about the different ways to get your free credit reports here.

Final Thought: Freezing Your Credit

While monitoring your credit is crucial, it still means that you’ll find out if someone else has opened a credit line in your name only after the fact. So you should freeze your credit with all three major credit bureaus.

With a credit freeze in place, no one (not even you) will be able to open a new line of credit in your name without first unfreezing your credit — which only you should be able to do.

Get step-by-step instructions for freezing your credit with all three credit bureaus here.

 

Written by Clark.com Staff

https://clark.com/credit/how-to-monitor-credit/

 

Top Remodeling Projects for Resale

Top Remodeling Projects for Resale

Refinishing hardwood floors is the remodeling project that pays back the most, recovering the highest percentage of its cost—147%—at resale, according to the 2022 Remodeling Impact Report, a joint study from the National Association of REALTORS® and the National Association of the Remodeling Industry.

Home remodeling projects aren’t only offering a potential boost at resale; they’re also making homeowners happier. Painting a home’s interior, adding a home office, installing hardwood flooring, and renovating closets made consumers happiest, the report shows.

The remodeling boom has continued since the pandemic began as homeowners’ desires to spruce up their homes grow, whether through large house additions or simply small one-room painting tasks.

“Quite often, an added benefit to home renovations is the possibility of an increase in the home’s value, which is a reason why some people remodel,” says Jessica Lautz, vice president of demographics and behavioral insights at NAR. “This is especially advantageous to a homeowner who may be considering selling their house or converting the home to a rental property.”

For the report, REALTORS® provided an estimate of the likely dollar value of various remodeling projects that could add to the value of a home during resale that was compared to National Association of Remodeling Industry remodelers’ estimations of project costs.

Besides refinished hardwood flooring, new hardwood flooring also had the potential for a high recovery at resale, at 118%, as did upgrading the home’s insulation, at 100%, the survey shows.

Among exterior projects, new roofing and garage doors had recovery rates reaching 100% of the project costs, according to the report.

Kitchen upgrades also showed a high potential payback at resale. NARI remodelers estimated an average kitchen remodel would cost about $45,000. But REALTORS® surveyed estimated that $30,000 of that would likely be recovered at resale—a 67% recovery rate.

House Projects That Bring the Most Joy

The survey also identified projects that made home renovators want to remain in their homes and those that brought them an increase in the enjoyment of their spaces. The home remodeling projects that received a “Joy Score” of 10, the top score, were:

  • Painting a home’s entire interior
  • Painting one room
  • Adding a home office
  • Hardwood floor refinishing
  • Closet renovation
  • Insulation upgrades

The Remodeling Boom Continues

Americans spent $420 billion in 2020 on home remodeling. Contractors report greater demand for services and for larger-scale projects, such as remodels of more than one room, according to the 2022 Remodeling Impact Report. Eighty-six percent of consumers reported that remodeling one area of their home then inspired them to remodel other areas of the house.

“The pandemic has changed the way we use our homes, and many of those changes are here to stay,” Lautz says. “As a result, homeowners needed to reconfigure or remodel how they use their home and maximize space.”

Thirty-five percent of homeowners said one of the top motivators for their remodel was to improve their home’s functionality and livability.

Also, 22% of homeowners were motivated to have greater durability in the materials and appliances inside their homes. Fourteen percent were motivated to improve the beauty and aesthetics of their home.

Source: 

2022 Remodeling Impact Report,” National Association of REALTORS® (April 6, 2022)

 

 

 

 

Homeowners Can Make the Most of Their Yards—Even in Winter

Homeowners Can Make the Most of Their Yards—Even in Winter

After almost two years of pandemic life, homeowners understand the significant value of having a yard.

Here are 8 ideas for getting creative with outdoor space. 

January 2022

 

by Barbara Ballinger

Key Takeaways:

  • Backyards continue to be a way to extend square footage, even during colder months.
  • To get started, homeowners should make a list of their favorite ways to spend time outdoors.
  • They should consider decorating “rooms” of the yard but also have a place to store items when storms and winds come.

Spending time outdoors at the height of the pandemic was a way to get fresh air, exercise safely, and expand living quarters. Now, nearing two years later, an outdoor retreat has become even more sought after, causing homeowners and design professionals to get creative in maximizing square footage.

©AleksandarNakic – Getty Images 

Whether homeowners have a big suburban yard, rural acreage, or a small urban balcony, there are multiple ways to take advantage of the space, even in winter. They can pile on layers or follow the Swedish mantra of Friluftsliv, which translates to “open-air living and the value of spending time in remote locations for spiritual and physical well-being.”

The key isn’t the size of their space, or which activities homeowners do, but taking advantage of Mother Nature’s gifts—air, sky, clouds, sun, and greenery.

Millennials and other new homeowners have become particularly adept at using their yards for almost everything—from camping out with a tent and fire pit to organizing a staycation, or setting up an alternative office when they need a break from their indoor space, says Kris Kiser, president and CEO of TurfMutt Foundation, the education arm of the Alexandria, Va.-based Outdoor Power Equipment Institute, which encourage enjoyment of nature.

©OPEI/TurfMutt Foundation 

Kiser says there’s even a new term for this trend, which doesn’t need translation: Backyarding!

Here are eight ideas to share with clients to help them make the right investments in furnishings, landscaping, appliances, and more for their yards.

Link the indoors and outdoors by blurring lines.

The most common way to do this is to add more windows and doors to connect the spaces and make the glazing bigger to achieve better views. It can also be done by using more colors and textures found in nature inside the home and bringing in plants. Homeowners can also decorate outdoors as they do inside, according to the online design resource, Houzz. The company’s search data shows that people want their backyards to be relaxing extensions of their interiors, which can be handled with stylish, durable materials, as well as by adding a fireplace or fire pit, outdoor TV, sound system, and comfortable seating, pillows, and rugs.

©OPEI/TurfMutt Foundation 

Set up an outdoor office.

Many people made do with cramped makeshift offices during the pandemic. Others created separate indoor spaces but working outdoors can literally offer a breath of fresh air to ramp up creativity. Flowers, bushes, and trees can become the living backdrop on conference calls instead of the kitchen counters or office bookcases. Essentials to make it work include strong Wi-Fi, an electrical outlet or two for equipment that’s not wireless, a sturdy table for a laptop, a comfortable chair, lighting for night-time work, and a rug to add warmth underfoot. Some may want a small portable generator to keep power running, Kiser says.

 

Dine al fresco.

Homeowners shouldn’t limit themselves to only eating dinner outdoors. Any meal—breakfast, brunch, lunch, cocktails, and snacks—can be enjoyed plein air. They should have a nice flat area, whether a balcony, terrace, or deck, to set up a table and chairs with enough space to navigate around them. Homeowners also should choose a material that won’t need frequent repainting—many closely resemble real wood and stone and are sustainable. Add the right equipment—a grill, pizza oven, running water from a spigot that won’t freeze (or a sink), and firepit—to make the experience more enjoyable. They can hang some lights, maybe a curtain, and if there’s room and funds, construct a pergola for an overhead cover. If the homeowners like the sound of running water, they can add a recirculating fountain so the water won’t freeze in the winter.

©OPEI/TurfMutt Foundation 

Add entertainment.

All work and no play isn’t fun, and the outdoors is a perfect place for classic games like croquet and badminton, and board games such as Monopoly and Clue, or jigsaw puzzles. Many families are also investing in large-screen outdoor TVs and movie projectors. And then there are all the pools being built. If there is no room or funds, they might consider a less costly above-ground pool or smaller hot tub. Suggest they position it close enough to the house so they’re not trekking far in the cold or snow.

 

Establish a wildlife habitat.

Attract pollinators such as bees, butterflies, and birds by planting the right flowers and plants. Add a greenhouse if there’s room, which will allow homeowners to garden all year. A birdhouse and feeder or two, and great additions; even a chicken coop is becoming more commonplace.

©Allie Filley 

Kris Kiser and Mulligan (Mo-Mo) – OPEI/TurfMutt Foundation 

Make a yard pet friendly.

Are your clients’ pet owners? If they have a dog, they could add a fence of some type, maybe a sandpile for digging, a doghouse that’s large enough so Fido doesn’t feel cramped, and perhaps an agility course so he or she gets good exercise. Hardscape like bricks, concrete pavers, or stone can be an alternative spot to urinate that won’t ruin your lawn. Also, homeowners can consider some faux lawn choices—many look authentic—and avoid planting things that are toxic to dogs and people, according to The Spruce.

 

Store neatly.

Even outdoor spaces can become cluttered. A shed or closet in a garage can be set up with shelves, bins, and hooks to hang rakes, bicycles, helmets, and more. This will also keep tools out of reach of young children, and provide a place to store fuel safely, too, says Kiser.

 

Create some privacy.

While homeowners may want to have a friendly relationship with their neighbors, they may also want some privacy at times, especially when working from home or throwing parties. Fences work well, but so can living screens of greenery—rows of trees, bushes, or vines. They should choose native materials that don’t require a lot of watering and consider materials that provide color or texture year-round. Suggest they start small with plantings that will grow over time, which is less costly than investing in big, mature plants.

While many of the tips on this list can be undertaken by a skilled DIYer, homeowners should also consider contacting a contractor, landscape designer, or architect sooner rather than later since many are booked far in advance.

 

 

 

 

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