One of the 1st lessons I learned when I became a Realtor was that Real Estate is a local co...mmodity and what sells in the Fort Hood area is quite different from sales trends in Temple Tx or Albany NY. Being a buyer in the Fort Hood area usually means the seller will pay most if not all of your closing costs if they want to be competitive in our marketplace. The costs are usually in the 11% range if you factor in the brokerage fee and lender charges & pre-paid items. Yes, even your Real Estate agent is paid by the seller. So as a buyer you really have very little out of pocket expenses when purchasing. But lets fast forward 2 years.
You purchased your home and have enjoyed 2 years of homeowner bliss, you've built a nice deck out in the back yard, did some nice landscape upgrades and then you get orders to PCS to Fort Carson. As a seller, you are now going to have a bill of roughly 11% of the sales price in order to sell. And if you used a VA Loan to finance your purchase you probably financed your VA Funding Fee too so not only are you going to pay 11% in closing costs but you owe about 3.5% more than the purchase price because the VAFF was financed. So now where do you go?
In a good economy your home should appreciate in value at a rate of around 3 to 4% per year. New homes tend to fetch a bit more in the 1st 5 years of ownership. But in bad economy's such as the years 2008 through 2011 most homeowners saw no appreciation during this period. In 2012 we slowly began to see our appreciation return.
But you still have orders to Carson in your hand and everything we discussed up to this point is worthless, or is it? If I could pass on 2 useful tips to a homeowner at the time of purchase they would be "Pay your VAFF in cash, don't finance it" and remember "You have to own your home for 5 years before you can sell your home and pay closing costs. This only applies to those who paid their VAFF in cash. If you financed your VAFF you'll need to own your home around 7-8 years. This applies to folks who have already purchased a home too. It's never too late to send your lender a Principal Only payment, maybe spend half of your tax return paying down your debt. As with any investment, owning a home requires good planning. For some, purchasing a home is the largest investment they will make in their lifetime and on average one will purchase 3 homes, their 1st home, their 2nd home as the family grows, and their last home, when the children have left the nest. I have served many families in the Fort Hood area since 1999 and it's been a pleasure indeed. For those who have made a career out of serving in the military there's a good chance you will be back to Fort Hood during your tour of service. It's not uncommon for me to meet soldiers who own more than 1 home and keep them in property management. There's no better way to own a home than to have someone else paying for your mortgage through rental. If you or someone you know is considering purchasing a home but have questions about the purchase process I'd be happy to assist you.