It’s PCS (Permanent Change of Station) season, which means it’s also homebuying season for military families. While these life events may be challenging, with the right organizational plan, you may look forward to a smooth transition and keep your finances in check.
If you’re looking to buy a home this summer, check out this free Homebuying Guide and the tips below.
Understanding PCS Moves
PCS orders are long-term assignments that generally last from two to four years. They are issued by the Human Resources (HR) office of your military branch or Department of Defense (DoD) agency when you or your servicemember receives a new duty assignment.
PCS orders are divided into two types:
- CONUS: Within the continental 48 United States.
- OCONUS: Outside of the continental 48 United States, including American territories, Alaska, and Hawaii.
Your orders will also include whether your PCS is an accompanied or unaccompanied move.
- Accompanied: These moves are common for long-term overseas assignments or domestic relocations where dependents are permitted. The servicemember is authorized to bring dependents (usually a spouse and children) to their new duty station. The military will cover relocation costs for both you and your dependents, including housing options and family support services.
- Unaccompanied: With this type of move, a servicemember must move without dependents due to restrictions at the new duty station, such as in an unsafe region, and may not receive financial support for moving their families or dependents. Dependents may face limited access to base services, healthcare, or job opportunities if they do join their servicemember unofficially.
PCS Real Estate Considerations
You may make your PCS transition smoother by understanding what needs to happen and when. Whether you're moving across the country or overseas, timing and flexibility are your keys to navigating the real estate process successfully.
The Ideal Timeline to Start Real Estate Planning
Before you receive your PCS orders, you’ll want to find and organize your important documents, research potential duty stations, and look for trusted real estate professionals. Even if you can’t take action before receiving official orders, checking these items off your PCS to-do list will ensure you’re ready to go.
Once you have your PCS orders, it’s time to start planning your housing strategy — from researching neighborhoods and setting a realistic budget to getting pre-qualified for a mortgage if you plan to buy. If possible, allow 3–4 months from the beginning of your house hunt to your move-in date, as closing on a home typically takes 30–45 days after a contract is signed.
Working with Deadlines
Tight PCS deadlines make it even more challenging to buy a house when you’re coordinating from a different time zone or have overlapping lease or mortgage obligations. You may make things easier by taking advantage of virtual tours online to evaluate homes as well as using other remote homebuying tools.
Tips for Navigating Real Estate Issues During a PCS Transition
Follow these tips when dealing with real estate issues before and during your PCS:
1. Consult a Professional Upfront
Start by contacting lenders or real estate agents to get an idea of your financial wellness and how much house you can afford. Use this free online affordability calculator to help you get started.
A real estate professional may advise you on the local housing market, be your “boots on the ground,” and educate you on the homebuying process. They may also point out “red flags” that may hurt your chances of having a bid accepted or getting favorable loan terms. For instance, a lender may recommend you take steps to raise your credit score if it’s under 620, while a real estate agent may monitor listings, arrange for showings, and work with the seller’s agent to answer your most pressing questions.
Websites like Zillow or Trulia may help you learn more about potential neighborhoods and school districts to ensure the areas you’re considering make sense for your family.
2. Get Pre-Qualified
If you’re financially ready to buy, the next step is getting pre-qualified by a lender. While pre-qualification is not a guarantee you’ll qualify for the loan, it also does not bind you to that lender, and it will help you understand how much a mortgage you may be able to get. You may still “shop around” for the best loan terms when the time comes.
There are stages to getting pre-qualified for a mortgage and then getting a pre-approval:
- Speak with a licensed mortgage loan originator who’s familiar with the military community, such as AAFMAA Mortgage Services LLC (AMS), with Military Mortgage Advisors available to explain the process.
- Fill out a loan application and provide income, asset, and debt information.
- Lenders will evaluate your application and credit report (with your permission) and then may use an automated underwriting system to independently verify your income, assets, and debt and assess your creditworthiness and debt-to-income (DTI). If your initial information is consistent and meets their underwriting guidelines, the lender will provide you with a pre-qualification letter. Some states require additional disclosures to issue a pre-approval letter.
Loan pre-qualification lets you move forward with the homebuying process and shows your real estate agent and sellers that you’re a serious buyer. Knowing you’re pre-qualified (versus other bidders) can settle an anxious seller and encourage them to work with you.
3. Do Your “Home” Work and Shop Around
Familiarize yourself with your lender’s terms. Review useful tools, such as this “cheat sheet” of 11 mortgage acronyms you’re likely to come across. Knowing what these mean may move things along more quickly and help you feel more confident.
However, if a real estate agent or lender uses a term you’re unfamiliar with, be sure you ask them to explain. This not only builds your knowledge but shows their willingness to work with you in making the process clear and understandable. It’s also a good idea to talk to multiple lenders and compare quotes. According to Freddie Mac, getting just one additional rate quote could save you an average of $1,500 over the life of the loan, and getting five more quotes saves an average of about $3,000.
For some qualified homebuyers below the Area Minimum Income (AMI), there may be downpayment assistance programs that might help you boost your downpayment and help cover some of the closing costs (typically ranging from 3% to 3.5% of a home’s purchase price). Many of these programs waive first-time buyer requirements for servicemembers and Veterans, and some are available exclusively for members of the military. Be sure to ask your military mortgage advisor or lender about down payment assistance programs in your area.
4. Be Ready to Negotiate
Many homebuyers don’t realize there’s room for negotiation at many steps in the buying process. These typically include closing your loan and home purchase quickly or having the seller cover a portion of your closing costs.
First, let your agent help you craft an attractive offer that leaves room to negotiate with the seller on price until you agree or walk away. Your offer may include specific incentives you feel would make it stand out, such as being willing to close quickly (generally in 30 days or less) or renting back to the seller if they need to stay in the home longer. You may also ask the seller to cover all or a portion of your closing costs, pay for a one-year home warranty, or agree to a temporary buydown. Keep in mind that you may not be able to negotiate in competitive home buying markets such as those with high demand for homes and low housing inventory. In those markets, you may not have the ability to negotiate as much, and you may need to make your purchase offer more compelling.
Key Real Estate Decisions During a PCS Move
Your real estate decisions, such as buying, selling, or renting come with trade-offs that depend on your financial situation, timeline, and future plans. Be sure to get professional help if you need it as you weigh these decisions and prepare to relocate.
Buying a Home During a PCS Move
Some considerations to take into account if you decide to buy a home during your PCS move include:
Timeframe
While closing on a home typically takes 30–45 days, you'll also need time for home searches, inspections, and financing steps. If you're relocating on a tight schedule, consider remote home buying options or temporary housing until you close on a new property.
Finances and the Local Market
Before you buy, assess your budget, including moving costs, new cost-of-living changes, and the potential resale value of your current home. Market conditions at your new duty station may heavily influence whether buying makes the best financial sense for your situation.
VA Home Loans and Choosing a Military-Friendly Agent
VA Home Loans may offer up to zero down payment, no private mortgage insurance, and competitive interest rates, but you may have to pay a VA funding fee unless you qualify for an exception (no funding fee or a reduced funding fee) depending on your situation and whether you previously used your VA Home Loan benefit. With a knowledgeable lender, VA Home Loans may be an efficient way to buy a home. Military Relocation Professionals (MRP) or similar certified real estate agents understand PCS pressures and timelines.
Selling Your Home During a PCS Move
PCS moves don’t only involve finding a new place to live. You may need to sell your current home, as well.
Prepare Your Home for Sale
Small updates like fresh paint, deep cleaning, decluttering, and home staging may significantly boost your home's appeal to potential buyers. Prioritize cost-effective repairs that would otherwise delay a sale or turn off buyers, such as fixing leaky faucets.
Time the Sale
The real estate market might not align with your PCS schedule if it’s a buyer’s market. If your home doesn’t sell before your report date, you may want to think about renting it out.
Consider Property Management
If you need to rent out your home, a professional property manager may handle leasing, maintenance, and tenant issues while you're stationed elsewhere. This offers income potential without the headache of managing tenants long-distance.
Renting During a PCS Move
You may need to move before you’ve purchased a home. Or, you may decide that renting makes more sense for this PCS. Here are some tips to keep in mind.
Pros and Cons of Renting
Renting is a good choice if you're unsure how long you’ll stay at the new duty station. It offers flexibility and lower upfront costs, which may be helpful if your PCS orders are short-term or subject to change. However, you won’t build equity, and rent payments don’t contribute to long-term wealth.
Military Housing Options
Off-base rentals provide more lifestyle options but may require longer commutes and more upfront research. Take advantage of your new installation’s housing offices and real estate sites tailored to servicemembers for off-base rental options.
Short-Term vs. Long-Term Rentals
For shorter assignments, a furnished rental or short-term lease might make the most sense. For longer stays, a standard lease offers you better value. Some landlords or management companies offer a military clause in the lease agreements that allows early termination if your orders change.
Help During Your PCS Move
Whether you’re thinking about buying, ready to start home-shopping in earnest, or considering a refinance, an AAFMAA Mortgage Services LLC (AMS) Military Mortgage Advisor will be happy to provide you with an honest and fair comparison of your mortgage options, including a wide range of affordable mortgages designed to meet your needs.
Whether it’s your first or 10th PCS, AMS has the resources you need to understand the steps involved, create a financial plan, and get organized.
Ensuring Armed Forces Mutual Members obtain the best mortgage possible is their mission. Get your free mortgage assessment today by calling 844-422-3622.
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This article was originally published June 29, 2023.