Military Finance Report: USAA Mover's Advantage Program Review Part 3: The Offer and The Loan

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Sunday, November 10, 2013

USAA Mover's Advantage Program Review Part 3: The Offer and The Loan

Read Part 1 here: Part 1: First Contact
Read Part 2 here: Part 2: Update

As I mentioned in Part 2, Louisiana has complicated school zoning laws so my wife had to go there two months before and try to find a house so we can close before we arrive.  Louisiana was going to allow us to use the Temporary Lodging Facility zip code but that placed our kids in undesirable schools.  We had to find the schools we wanted then find which housing communities are in that zone and then refine our search.

Our USAA-sponsored realtor had his site populated with houses in those zones, in our price range with the requirements we wanted so we had a good idea of what we wanted to see.  My wife flew in and saw a couple of houses that night.  The next day she saw more houses, and using Skype, we discussed her top three houses.  To her surprise, I picked one of the more pricier houses on her list and was her #1 choice.  The reason why I chose that is because all of the houses were comparable in meeting our requirements, but the more expensive one was actually a better value. 

The value of comparable houses is expressed in cost per square foot.  This house was only $125 a square foot versus $133 and $136 for the other two in her top three.  Based off asking prices, the average for the Barksdale AFB area was $135.  So I was getting this house for $10 a square foot cheaper; or a 7% discount to the area average.  Our realtor told us he would calculate all the prices of our top three and see what kind of flexibility we had.  The next day my wife told our realtor that we selected the more expensive one and he told us that the house's, we picked, price was just lowered so we didn't have any price flexibility.  But since the owners were trying to move out quickly, our offer was the asking price minus closing costs and to keep the hot tub (our realtor's idea, not ours...lol).  Our offer was accepted!

A surprise to us, our USAA-sponsored realtor actually recommended that we at least consider a local mortgage company versus going with the USAA-mortgage company.  I was already concerned with USAA's mortgage company's communication and response (read more about that in Part 1, link above) so we got the information from a local mortgage company.  They were very friendly and gave us an Itemized fee worksheet for each loan at each percentage rate.  USAA Mortgage company didn't offer any of that visibility/transparency.  I used that itemized worksheet and called USAA to go over each fee.  Since I was using my Veteran's Affairs loan, there was little difference in the fees, but the advantage was that the local mortgage company was able to work with the logistics of us not being in Louisiana during closing.  USAA's mortgage company did not offer that service.  We would have to close by mail and could significantly extend the closing price if we went through USAA.  We chose the local mortgage company.

So far, these were the costs that I've incurred while purchasing a house:
  • $50 for the USAA pre-approval (they were going to charge another $300 if I chose to go with them).  I will have to call them and tell them we are going with a different mortgage company, so that $50 may be lost.
  • $1,000 for my wife to fly out, rent a car and stay in a hotel to find the house and put an offer on it
  • $1,200 for the escrow deposit
  • $350 for the home inspection.  The buyer pays this cost to ensure that the seller doesn't purchase a shady inspector
  • $400 for an appraisal fee but this check won't get cashed unless we (the buyers) back out of the deal
I look forward to hearing other stories of purchasing homes using any other method specific to military members.  

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