The Foreign Service Journal, June 2018

38 JUNE 2018 | THE FOREIGN SERVICE JOURNAL Home Buying: A Quick Start Guide C arolyn Connell is a former eligible family member (EFM) and current Realtor with Keller Williams Realty in McLean, Virginia. Named to Washingtonian Magazine ’s “Top Realtors” list for the past three years, Connell says more than 50 percent of her business comes from the Foreign Service community. Katie Stowe is an EFM and Realtor with McEnearney Associates who recently closed on her own home while her FSO spouse was in Dhaka. Bob Rosenbaum is a senior loan officer withWashingtonFirst who has worked with many FS members over the past decade. Here’s what these experts told us about how to buy a house. First: Find a Great Realtor. Get referrals from family and friends, says Connell. Ask potential candidates what areas they serve and how much experience they have helping clients buy a home long-distance. It’s also critical, she says, to find out how technologically savvy they are, because “you will be dependent on technology to be able to view every aspect of the house, neighborhood, statis- tics, etc.”Make sure you check their references, and ask if they have connections with other community experts, such as lenders, contractors and inspectors. “A poor agent can cost thousands of dollars to buyers and cause all kinds of headaches,” says Stowe, so choose yours carefully. Because working with a buyer from a dis- tance can potentially be more work for a real estate agent than working with local clients, Stowe recommends that you look beyond the area’s high-volume Realtors, who may simply not have the time they need to put in on your behalf. Get Pre-Approved. You will need a pre-approval letter from a lender. Talk to both the State Department Federal Credit Union and the United Service Automobile Associa- tion (USAA), but also ask your real estate agent who their preferred local lenders are. Connell says that local lenders “will be more motivated to win your business, because they don’t get paid until the home closes, unlike the employees at large credit unions.”A local lender might be able to match a valid quoted rate from another institu- tion, and “you might get better service from the local guy.” Make sure to compare rates on the same day, as they vary on a daily basis. To find a loan officer, Rosenbaum recommends asking friends for references and checking out online resources such as AAFSW’s Livelines, Angie’s List, Checkbook and Facebook. Don’t be surprised, he says, if potential loan officers ask you to fill out an application. This doesn’t com- mit you to using that specific officer; but, he explains, “as a loan officer, it’s extremely difficult for me to provide you with accurate answers, or my best advice, without having your full financial picture.” One advantage that SDFCU provides, says Connell, is that “they can sometimes treat the purchase of a home as a primary residence if it is your only home or will be your primary residence when you return to the United States.” You’ll get a lower interest rate on a primary residence. Why can SDFCU do this when other banks can’t? Rosen- baum explains that unlike Freddie Mac or Fannie Mae, “SDFCU holds their loans on their books and therefore can create their own rules.”Any bank that lends its own money can decide what rules are appropriate. His own company also keeps some loans in-house and so can decide what amount of risk is acceptable. Investment properties, such as a home you intend to rent out, present a greater risk to lenders than owner- occupied homes, so banks frequently require at least 20 percent down for such properties. Decide What You Want. Get clear about the details of your ideal home: Connell advises clients to write out the non-negotiables ahead of time so they aren’t swayed by a beautiful view or appealing kitchen tile. Imagine yourself in it: Will you be entertaining? How many bedrooms and baths do you want? Do you need a garage, view, etc.? Do you want to be able to walk to restaurants and shops? Do you want something move-in ready, or are you willing to do some updating? Research the Rental Market. Ask yourself: Is this house an investment or a future home? If it is an investment, Connell advises you to “make sure it makes sense from