“Zero down. Low rates.” “No PMI.” “Relaxed credit standards.” These phrases might ignite flashbacks to the very days that sparked the worst recession since the Great Depression in many real estate agents — the real estate boom and bubble from 2001-2006.
In spite of this, these terms today should bring a smile to your face as you recognize these lending terms are for the most deserving — our brave veterans and active servicemen. These superb and enviable benefits are backed by the U.S. Department of Veterans Affairs, which offers additional assistance to our military heroes in times of job loss or other financial distress.
As the savvy real estate professional I know you are — what I like to call an “Agent+,” it is prudent for you to understand the ins and outs of the VA loan process. If you were not able to attend the panel discussion, “Mastering the Art of Serving Veterans,” I want to share some of my takeaways, but I highly encourage you to check out the National Association of Realtors’ Military Relocation Professional (MVP) Designation, which also covers this information thoroughly and more.
Here are some uncommon questions with insightful answers that will help your ability to serve our nation’s soldiers:
Do you know which states treat veterans as a protected class, making it off-limits to inquiry about military status?
Many of us are proud to embrace and represent clients who currently fight or have previously fought on behalf of this nation. To ascertain this information, quizzically we might ask new clients, “Did you serve?” But in states like Massachusetts, Realtor Maura Neill, who is the national subject matter expert for the MVP designation, shared that you are breaking the law if you ask clients to identify their military affiliations, because military status is a protected class. What the what?!?
I dug a little deeper and found that more than 30 states have language that protects the military against substandard treatment (rightfully so!). Consequently, what you might think is a harmless question about one’s military background might actually be perceived as discriminatory and land you in hot water. So if you have worked in states such as Georgia, where military status is freely discussed, make sure you know the laws surrounding this, especially if you are transitioning or expanding into selling real estate in a different state.
Do you know the polite way to ask veterans if they are disabled?
After you have legally identified that someone is a veteran, you will want to ensure that she understands all of the applicable housing benefits. Particularly, a disabled vet might qualify for specially adapted housing grants, which give vets money to modify their dream homes to make them wheelchair-accessible and more, and might not have to pay any funds out of pocket, including the VA funding fee, to purchase a home. These are remarkable benefits, but it can be tacky, rude and illegal to ask someone, “Are you disabled?” Good grief.
Instead, Jennifer Tillery with the Atlanta VA Regional Loan Center recommended simply inquiring of a known veteran, “Are you receiving monthly checks from the VA?” That might perhaps be more palatable, and if the answer is yes, Tillery says there is a high probability that those payments are issued due to a disability. At such point, she suggested you can share the extras available.
My recommendation is to go one step further and give to all of your new clients an introductory package and/or email a guide that explains all of the various forms of help available when buying a home in your neck of the woods. Include in the materials a call to action like, “Interested in learning more about any of these benefits? Call me today at ______.”
By having a standard, introductory deliverable that apprises all homebuyers of the assistance associated with being a veteran, as well as other distinctions such as first-time buyer, senior citizen, educator, emergency service provider (police officer, etc.), urban renewal project participant (such as Atlanta’s famed Beltline development) and so forth, then you can avoid altogether awkward and illegal questions in multiple arenas with one stroke.
What if a veteran is interested in a condo?
If you have ever worked with Federal Housing Administration condo purchases, you might be familiar with the fact that there is usually a concentrated list of approved complexes. For VA, this list is even shorter. Therefore, visit the VA portal before taking a client to see, and fall in love with, a condo that might not be on the approved list.
On the bright side, VA does allow spot approvals, where a singular condo unit not in an approved complex might receive approval on a case-by-case basis, but this process is not for those in a precarious housing predicament, the impatient or the faint-hearted. Essentially, make sure in the beginning that your veteran buyer has the time available to wait for a spot approval.
Mike Andrews with the Atlanta VA Regional Loan Center shared that the typical deal-breaker for receiving spot approval is when a community’s CC&Rs include language regarding first right of refusal, like in a co-op.
How to know if a lender is truly experienced in working with VA loans?
Tillery recommended asking the lender to explain these terms to you: “Tier 2” and “bonus entitlement.” Be sure you have researched this first so that you understand them. This will help you determine a client’s aptitude for VA loans. If the lender can explain these terms without fumbling or Googling them (this is indicated by the sound of typing if you are on a phone call), then, Tillery explained, you probably are working with a VA loan whiz.
Samantha Reeves of Veterans United says that savvy agents will also ask:
- What percentage of VA loans have you closed in the past year?
- How many did not close in the past year, and why?
- Who will be my contact person throughout this process? Will I call in and speak with a different person each time?
- What resources do you have for agents?
- Do you have any references?
And do not forget to swap stories with colleagues to discover a reputable, customer-oriented lender that might not have a broad Internet presence but is a true VA specialist.
These questions just scratch the surface of working with military buyers so visit Benefits.va.gov for more helpful information, including veteran eligibility charts and the lender handbook. Also, be sure to check out the MRP designation that I mentioned earlier to become proficient serving those who have served our country well.
Lee Davenport is a licensed real estate broker and the owner of Agents Around Atlanta Plus.