Military Tips

Advice on military life, real estate, finance, education, and deployments

Real Estate

How to Negotiate a Lower Rent for Your Next Home

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Home owners like military renters. Why? Because they greatly reduce the risk of them losing any money. A home owner is scared that 1) the renter will stop paying rent and it will take months to evict them or 2) the renter will tear up the home and will not be able to cover the repair costs when they move out. Home owners know that military cannot walk away from debts without repercussions. That’s why, as a military renter you should take advantage of this and negotiate a lower rent.

My track record on this is solid, as I’ve rented very nice homes at each base I’ve been to, and have lowered my rent by about $200-$300 every time. I normally look for homes that are slightly out of my price range, then negotiate down to my BAH. Nicer homes have a greater margin for negotiation as many homeowners expect to take a small loss in return for decreased risk.

As a homeowner myself, I recently rented our home for a reduced rate to a military couple because I saw the advantage in having someone stable and accountable in my home.

To aid your negotiations, offer to sign a three year lease. This is appealing to the homeowner, but is also an advantage for you. We move enough… the last thing we want to do is move in between a tour. Locking in your lease for three years gives you fixed rent and less worry that you will be kicked out in between lease periods.

When negotiating your rent, you really have nothing to lose. The worst the home owner can say is no. Before saying no they will likely come back with a counteroffer.

There is only one scenario I can think of where you should not try to negotiate. Certain markets have neighborhoods that are highly desirable. For instance, Mililani in Oahu, HI, is one because it is known for good schools. Many of the homes there will having waiting lists to tour the home when it’s available for rent. If you see a situation like this, then you need to jump on a house when you really like it. However, these neighborhoods are an exception, and will reveal themselves when you start calling around.

In summary, do not underestimate your value as a potential military renter. Get out there and make a deal.

Top 3 Banks Offering Low VA Mortgage Interest Rates

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Compare rates among these three banks.  Whichever you choose, you’ll end up with a very competitive rate, low fees, and outstanding customer service.

1. Pentagon Federal Credit Union – my first home loan was through PenFed. I found them through the FatWallet finance section.  When every bank offered me 7.0 percent, PenFed came in at 6.25.  They are very competitive with closing costs as well.

2. USAA – while USAA may not always have the lowest rate, they are competitive and should be compared when shopping for a home loan.  Their customer service is unmatched. One caveat:  USAA transfers the servicing of your home loan to US Bank once the application process is complete. I refinanced with USAA and was bummed to find out that I had to use a separate website and login.

3. Navy Federal Credit Union – I consistently see NFCU compared with PenFed and USAA as having the best rates in the business.

Who do you recommend when comparing home loans? Let us know in the comments.

How to Choose a Realtor for Your Next PCS

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You don’t need to rely on word of mouth to find a good realtor while in the military. By blending word of mouth with your own research, you can find a realtor that’s completed many sales in your price range and target market. If you’re looking for a $200K home in north San Antonio, you don’t want an agent that primarily deals with mansions in the west.

Here’s how I found a good real estate agent before moving to Shaw AFB:

1. Build a list of real estate agents that work in your desired city

Ask your future coworkers who they recommend. Write those names down.

Now do your own homework.  Look for homes online, and take note of realtors that represent homes you like. Look for real estate agents that represent sales in your price range and desired city.

Finally, add in some names from the top companies in the area. It does not hurt to expand your list, as the proof will come in the next step.

2. Interview those agents via email by asking for an activity list for the past 12 months

This step is key. Send each real estate agent an email telling them that you’re moving to the area and are considering purchasing a home. Ask for an activity list showing homes represented during the last year. You will likely get 1 of 3 responses:

  1. A handful of agents will reply back stating why you should choose them, but not send the list.
  2. A couple will completely ignore your questions:  aka “Love to do business with you, when are you coming in?”
  3. A minority will send you a detailed list showing their activity, and tell you why you should choose them.

The third group is proud of their sales and can back up their reputation with stats. If they’ve represented many buyers/sellers in the area, with most of sales falling in your price range and desired neighborhoods, then you know you’ve found someone knowledgeable that can show you around and find the best deal. Move everybody in the first and second group off your list.

3. Call or email the agents in the third group

Keep in mind the following when you talk to them:

  • Are they responsive to your questions? Do they actually listen to your questions?
  • Are they friendly?
  • Do they seem as knowledgeable as you initially thought?

You’ll soon get a feel for who you click with and who you don’t.

4. Rank order the agents based on all of your research

Factor in your coworker’s recommendations, sales statistics, and customer service to rank order the real estate agents.

The ideal agent will have completed many sales in your desired market. He/she will also be friendly and responsive.

5. Call and make an appointment with your top ranked agent

Make an appointment with the agent to ensure they are free when you come into town.

In the mean time, have them email you homes in your price range so you continue to get a feel for the market.

Final note:

Since you’ve chosen a top notch agent, chances are they will not ask you to sign a contract that binds you to them for representation. If they do, be cautious and consider moving to another realtor on your list. You should retain the flexibility to move to another agent if things aren’t working out.

Good luck with your house hunting!