How to Place a Winning Offer on a Home in 2021

EMILY BIGHAM: Hi and welcome to the podcast making sense. Brought to you by Navy Federal Credit union. I'm your host Emily Bigham and each week, I'll be taking your questions to the experts to help you make sense of your money unintended. Welcome to making sense. 

 

Today, we're talking with real estate agent Josh Chapman, he is a local agent here in the D.C., Maryland Virginia area. Josh comes from a military family and has a lot of experience helping service members and veterans find their dream homes. Welcome Josh, how are you today? 

 

JOSH CHAPMAN: I'm doing well, thank you for having me. 

 

EMILY BIGHAM: Thanks for being on. So today's headlines said we are in a housing crisis and not to start off with a dramatic question but are we in a housing crisis? 

 

JOSH CHAPMAN: So do you want me to answer that, yes or no? Because I could make an argument for both. 

 

EMILY BIGHAM: I think maybe that's the point. 

 

JOSH CHAPMAN: Exactly. So let me go with the yes answer first because if people see that headline and I'm sure you know anybody listening who pays attention to real estate probably has seen that. But the way that people interpret that of course, can be very, very different. And I would say yes, in the sense that we need more inventory. 

 

And so it being as much of a seller's market as we're in, where buyers have to get and do just outrageously competitive things to win, yeah, I think one could probably call that a crisis. It depends on how you look at it. Of course, if you're selling that would be the opposite of a crisis, but yeah, it could be perceived as that with low inventory and the fact that it all started with COVID, and has been slowly getting better, but we're still not actually, we're still well below pre-pandemic inventory levels. So why don't we if I get specified inventory crisis. How about that? 

 

EMILY BIGHAM: Yeah, I mean, I think that that's a good point that you bring up too because I think a lot of the focus is on the buyers. The first time home buyers. The fact that millennials happen to have a lot more cash than they used to and they're trying to find their first home but there isn't anyhow no homes for them to buy. What are some of the challenges that people are facing in today's market? 

 

JOSH CHAPMAN: Well, so I think to touch on what you mentioned the specific age group, millennials being well enough capitalized to buy homes probably for the first-- at least the last few years, we've been seeing many more millennials than ever before buying. But because the inventory is so tight, one of the challenges is just being competitive from a financing standpoint. And I go into this later on and talking with your lender, getting that stuff lined up, but even just I'd say eight or seven years ago when I was first getting into real estate, when it was-- it's a competitive area. 

 

Around Northern Virginia, D.C., Maryland, it almost always is but it was nowhere near as competitive as it is now. And you could have a client go out. You could take them to see five, six homes and they could say, all right. I'm going to speak with my lender now or Monday morning I'm going to call my lender, I'm going to get my FHA 3.5% debt which by the way that was how I bought my first home so there's nothing wrong with that loan product. But if you go and do that now, well, all right, half the homes you saw probably are already gone because the deadline was Sunday night or Monday at noon. 

 

You didn't talk to a lender already, the house is already gone. All right. And then the other challenge is being able to be competitive without having overwhelmingly strong finance, but it is still possible. And that's kind of what the news doesn't touch on very often is that even if you're not somebody putting down 20% 30%, you can still compete with all cash buyers. 

 

You compete with people putting down tons of money. You just have to be even more prepared. And I think that's what a lot of people are missing right now and maybe that's the biggest challenge is realizing just how much and how prepared they really need to be. 

 

EMILY BIGHAM: Well what if you can't be prepared? What if you're a service member and you're told that you need to move in x amount of weeks and you have to find out I guess I'm selling my home, am I going to buy a home in the next place and I mean what if you don't have that time to prepare? 

 

JOSH CHAPMAN: That's a good question, too. And I would say to anybody because actually I had a client recently that exact same situation. They were moving here from California, they're getting stationed here, and they were worried about that exact thing. They wouldn't have enough time to figure it out, but the reality is how it is. You can get prepared so fast. If you just spend 15, 20 minutes talking to your lender, you get the docs submitted, you can get a preapproval very quickly, then you talk with an agent in that area, and they're going to be able to tell you, OK, this is what you're pre-approved for and this is what you need. Maybe minimum bedrooms, maybe you have x amount of children or maybe you have to get a yard for your dog or whatever it may be. 

 

All right. Here's the areas we can look at, if these are your minimum criteria and then you go from there. And it can happen in as quick as 24 or 48 hours. I mean, that's exactly what we did with this client he had to move very quickly. So you can still do it and I know that can be a little tougher sometimes if people are overseas or literally on if someone's on the water might be a little hard to gather financial documents while you're traveling or anything like that, but that's the good thing about how quickly things can move is if you at least just start the process early or as soon as you know. It can get done surprisingly fast. It's just you don't want to it once you've already found the home because it might not be that fast. 

 

EMILY BIGHAM: Well, that's a really interesting point that you bring up because I think I don't know maybe 10, 20 years ago people were trying to find their dream home and now it's like well you're going to have to probably build your dream home. So let's think about what's really important here. First of all do you need to buy a house? Is this your first house or second or third, is this your nice to have, if so, maybe not a good time to buy a house. But you know I think that service members specifically are really good at this. It's like, all right. We-- I mean, they're good at managing a crisis. 

 

So if there's a housing crisis but they need to buy a house, they're going to find a way to buy a house. And maybe it's lowering your expectations for what that home is going to be, perhaps it's lowering your expectations for a location, I mean, it can happen. And I think that people tend to forget how different parts of different cities become nicer, become less nice, I mean, there's always going to be fluctuations like this. And I think it's like kind of just setting aside the anxieties about like well what if and more like let's just do it. 

 

JOSH CHAPMAN: That's key though, especially for the demographic you mentioned before. I think we're-- and this is something I talked to a lot of my-- I wouldn't even say millennial clients. It's just what makes up the majority of folks who might be buying their first home, but that could be anybody. I mean, I ultimately buy their first home this year and they were in their 60s. So it can be any age range and I think it's still-- I think the goal going into it can still be the same thing across the board and I think especially with folks who are military and what I always tell folks is look, we might be able to find something maybe it's a brand new home although these days brand new homes are hard to find, but everybody wants the brand new shiny object. 

 

However, normally, if you focus only on the house, as opposed to the location, that's where I see the challenge is down the road. Come up and people are maybe a little more unhappy about the decision later on but most importantly, if you focus on the ability to grow in that house but also the ability for that house to not only be something you live in, but a great investment and you look at it as something where, all right. This is a home I could go into, I could live here right away, but it's also something where maybe I could redo the cabinets. Maybe I could redo the kitchen. Maybe-- any kind of cosmetic updates, things like that. 

 

If you go into it and you find a house that has the opportunity to do those things and let's say a year later, two years later, you thought you were going to be in that area for five years and then you get stationed somewhere else, you get moved. Or if you've got a home that isn't completely remodeled or completely done, you don't have the ability to invest in that house, you could put whether it's 10, 15, 20, $1,000 into it really quickly, sell it, and now you have an exit strategy. 

 

So if you buy a home that has a little bit of work that's still needed, you're buying something that's a little safer for yourself. Because you have the ability to increase the value of the home and get out of it and either make money or potentially just break even as opposed to if you buy something where you can't do any of those renovations. You are essentially waiting and the market is only going to dictate the value of your home. 

 

And so I think military, folks first time buyers, anybody like that, if they look for something like you said lowering expectations is certainly one way to look at it or even just knowing like hey, maybe we don't need to search for the shiniest object or the most new home. Let's just find something that's in the most incredible location that we can find, that's going to make our lives better and our lifestyle will be a lot better. If you focus on that, everything else falls into place and I think that's the way to really, really look at it when you're just getting into first into home buying. 

 

EMILY BIGHAM: So switching gears a little bit talking specifically about loan products, we have a lot I think the VA loan here is our number one loan. It may be federal but I've heard that potentially when you're putting in offers in this competitive time, is it difficult to win with the VA loan? 

 

JOSH CHAPMAN: So that's like the first question. That's like the crisis question. I could say yes. 

 

EMILY BIGHAM: Yeah, it is. 

 

JOSH CHAPMAN: It's like an argument for it. And then I could say no and I could make an argument for that as well. 

 

EMILY BIGHAM: How about yes, it's hard to win but there is a way so-- 

 

JOSH CHAPMAN: Yeah, exactly. Yes with the caveat. So I-- the majority of my clients are military. I think after this week, I think the majority of my buyers that I've closed this year I think it's going to be like over 65% VA. And so it's definitely still possible and it's been the majority of my business and so it is challenging yes, but also still possible and a lot of times have people come to me and they're almost defeated before they even start. 

 

And actually I have a client like that that I'm going out with this weekend, who he's retired Air Force and he and his wife have wanted to look for homes for a while but they keep hearing all of these stories about their friends who are also military, who can't get their VA loans accepted. And what it really comes down to is the way that the sellers perceive them. Or well and/or the listing agents. And so it's very challenging because of all of the misconceptions that are going to surround VA loans, and listing agents who don't know much about them or owners, which they're not real estate professionals so they shouldn't know all about VA loans. 

 

I think it falls more on the agents than anything. They think that if they go with that over a conventional, maybe it's because they're 0% down, or maybe it's just because of things they've heard on the news, that's not going to close. Or it's going to be more challenging. And the way to get those offers accepted though and that's-- we can certainly go into that in greater detail, is to just have an agent as well as a really good lender, who both understand the VA loan and all of the intricacies of the differences between VA loans, conventional loans, FHA, and then being able to explain them to the listing side. 

 

And that's where it all starts is being able to just say, here's why my client is put in 0% down, they're approved for way more than they're buying for. Yes, this home is 650 and they're putting zero down. This person's approved to 900. They are probably even better. They're even more-- you know, these people could probably buy a more expensive home than some of the other people they're competing with, but the listing agent, if they don't understand the differences, they might look at somebody else and go, well, I don't know. I mean, they're putting 10% down. That seems, you know, that seems more secure. And just being able to explain why that's maybe not always the case. That's where it starts. 

 

EMILY BIGHAM: So it's having a relationship with your lender but also having a relationship with your real estate agent who knows the area and who understands what your needs are. I want to talk a little bit about affordability because when you are talking about the 5% to 10% over, let's talk about rates for a little bit because I think that the affordability goes back to the housing rates, and they're so low. So if you think back to when the housing rates were high and home prices were low, that all evens out. 

 

And another thing that I kind of want to get into a little bit is how the mortgage rates do not match what is going on in the economy, necessarily. It's pretty much tied to home buying, right? I mean, for example, the credit card rates, that does not match what's-- 

 

JOSH CHAPMAN: Right. 

 

EMILY BIGHAM: --happening with-- like, the prime rate, I guess is what I'm saying. So if we talk about affordability because you're throwing out high numbers, that seem scary, but people can afford that. They might just know it. 

 

JOSH CHAPMAN: Well, right. And that is kind of one of the other, I think, surprising things I see so much, and it's almost the opposite of what you would think. That's the generational thing that I do see more often. A lot of times, some of my older clients, if it is their first home and they were-- let's say the price is like the one that was just thrown out there. They might look at that and just think, that is so insane. 

 

That's also because even if they didn't own a home, they still remember what prices were 10 years ago, 15 plus years, whereas millennials, a lot of times they're looking at it, and they're looking only at the monthly payment, which, frankly, is-- that's kind of the way you should approach it. You should look at your monthly payment because that's what-- 

 

EMILY BIGHAM: [INAUDIBLE] 

 

JOSH CHAPMAN: Affordability. Exactly, and that's where rates do come in. And you're right. The rates right now, it is kind of detached a little bit from what you see. It's been fascinating to watch for the last year and a half, and don't want to try to-- if go into that too much in the relationship with the bond market, I think-- if anybody's made it this far in the podcast, they'll probably turn off, but-- 

 

EMILY BIGHAM: Or you might attract some different type of listeners. I don't know. I want to talk about the bond market. You know me. 

 

JOSH CHAPMAN: Yeah, let's talk about the 10 year and how that-- yeah, but the reality is it's what we've seen over the last year and a half is just so unprecedented. And I know people are probably tired of hearing that in every aspect of life, but it's so incredibly true when it comes to real estate and lending. And if we go all the way back to March when this first started, 2020, right, when things started getting pretty crazy, right, March, April, and we saw what was almost one of the greatest liquidity crises as far as mortgages go, and rates were all over the place. 

 

Well, then the Fed starts buying mortgage-backed securities. They don't buy enough of them, so then they buy too many of them. This causes rates to go up and down way more than they normally would. This causes huge issues for banks that, again, I'll try not to go too far into, but that-- then once we finally got out of that and banks were able to start lending to people again, restrictions were getting lifted, then rates were so low to really get everything-- getting the economy stimulated. And they're able to have these low rates because of how many of these mortgage-backed securities are being bought as well as some of those other things we mentioned. 

 

And then all of a sudden, you have such a high demand of people who want to either buy or refinance their homes that banks were able to actually increase the rates for mortgages strictly based off of demand, which is insane. That almost never happens, at least to the extent that we saw. It really is mostly correlated with the bond market and some of those other things. 

 

And so that now has started to taper off a little bit. The ginormous backlog of re-fis is getting worked through. At this point, the cat's out of the bag. People know, like, hey, rates are low. If somebody has wanted to lower their rate, at this point, they've probably done it. And if they haven't, the banks at least have the capacity to handle it now. 

 

So then what you see is a lot of people who just want to buy it because of how low rates are, and it's making it really, really affordable. And your-- and I'm blanking right now. You had somebody on your podcast to talk about VA. 

 

EMILY BIGHAM: Kevin [INAUDIBLE]. 

 

JOSH CHAPMAN: Kevin. 

 

EMILY BIGHAM: Yeah. 

 

JOSH CHAPMAN: Yeah. Yeah. Yeah. So Kevin made a really good point about how the benefits of the VA loan are-- the biggest benefit is rate, and it truly is the greatest loan product out there for veterans because you can get the lowest rate without having to do crazy things like having to buy points, or mortgage insurance, and all these other things that the general public does not have access to. And it's a great benefit for veterans, right? 

 

I mean, they should have access to this, and that's what we're seeing in a lot of markets just like ours, right, the DC metro area and just places where there's kind of a heavy military population. The buying demand is just through the roof because a lot of VA buyers are looking at it, and they're going, these homes, even with prices going up crazy numbers like we just talked about, are still so affordable because they could go, all right, sure, if I-- and I'll use 500,000 because that's more of-- I think it's still closer to the median across the country. But if somebody looks at a $500,000 house, and it's increased 10% over the last six months, and now it's at $550,000, even if someone is putting 0% down, their monthly payment from $500,000 to $550,000-- even though $50,000 sounds like a lot of money, and it is-- the monthly payment difference has probably moved around $300 to $350, right? 

 

It's not that much. A lot of people go, oh, well, $50,000 sounds like a lot, but I could stomach an extra $300 to $400 a month. That's manageable, and we have a lot of people saying that all at once. Then we go back to the very beginning of a potential inventory crisis because there's just not enough homes for all of these people who want to buy to buy. 

 

EMILY BIGHAM: Yeah, I mean, and I have a lot of thoughts about the inventory, but I do want to go back to-- I have two questions for you. So refinancing, if you have a mortgage and you're thinking about refinancing, what rate would you say is high enough that you should refinance? 

 

JOSH CHAPMAN: So that depends on-- and now I wonder if Kevin is going to come back and listen to this podcast because he's going to, hm, I wonder if he gets this right, but-- [LAUGHS] 

 

EMILY BIGHAM: We can ask him. 

 

JOSH CHAPMAN: No. No. No. No. So when you say high enough, do you mean-- if you have a rate that is a certain amount, at what point do you think you should take advantage of a lower rate, something that's lower than what you're currently at? 

 

EMILY BIGHAM: I mean, how would know if-- like, say you bought a house, like, three years ago and your rate's a little bit higher than what mortgage rates are right now, like in my mind, I would just talk to my lender. And I would be like, hey, if I were to refinance, what amount of money would I save because I do know that there are some additional costs involved with refinancing, so I just didn't know. If someone had that question, what would you point them to? Would you say go talk to your lender? Are there online resources? 

 

JOSH CHAPMAN: Yeah, so absolutely. You're correct. You talk with your lender, and what you really want to do is-- because hypothetically, if the rate is even the smallest amount below where your current rate is, like, what you could re-fi into is even just a hair below, there's still a situation that exists out there where that could make sense for somebody, right? And that's if somebody is going to have their home for a long time because if it only drops your payment by, like, $10 a month, well then what you have to do is go, all right, if this is going to cost me in closing costs because a lot of people don't realize that when you re-fi, you do have to-- there's title. There's all that. 

 

You're basically closing again, and you can-- a lot of times, you can roll that into the loan. There's ways around that, but, still, it's going to cost money and-- most of the time. And so let's say you only make your monthly payment better by $10 but it costs you $10,000 to do it, OK, well, that'll basically take you 1,000 months to get to the point where that might be worth it, right, whereas if you look at it and you go, OK, this is going to drop my monthly payment by hundreds of dollars, right, and I know I'm going to be in this house for 10 years, all right, it's probably worth it. 

 

But if you say, oh, I'm going to sell my house next year, I just want to drop my payment by 50 bucks until that time, well, your true out-of-pocket costs there is probably not going to make sense there. You're probably going to spend more refinancing your house than you'll actually save in monthly payments, so it all depends on what the lender tells you you can get versus what you're paying. And then you factor in, all right, how much is that going to cost, and what's my short and long-term goals for this home? And if you know kind of how long you want to be in the house for, then you can calculate your break even and figure out, all right, is this good or bad? 

 

EMILY BIGHAM: Another question that I had was related to 30-year versus 15-year mortgages. And if the rates are low, are more people going for the 15-year mortgage because the rates are low, and that would mean your monthly payment maybe is less than what it might be if rates were high? 

 

JOSH CHAPMAN: So I would actually take the opposite angle, and some people would be, right? And I think this is kind of an older generation thing that I see much more often. It's typically my clients who are older that do the 15 years because they're well capitalized enough to handle that larger payment. But if somebody takes a 15-year on a $500,000 house but they could also do a 30 on something at $700,000, most people say, it's around the same, and I'm getting a house that's a lot nicer. I think I'm going to go with that 30 because the rate is so low. 

 

And so that's one of those other things where it's like if it's someone's forever home and they're putting 20%, 30%, 40%, just an absurd amount down, it's all the house they could possibly ever want, and they can afford a 15-year, totally. They're doing it, and it makes sense. But if somebody is just starting out buying or maybe it's their second home, third home, maybe it's-- it's not their forever home, they're still trying to get everything in a home that they really, really want but maybe they're not quite there yet, that's typically somebody who's going 30-year because the rate's low enough, they're not having to pay a ton of interest to the bank, and they're getting closer to not only getting the house they want but they're also-- they're able to get more leverage, right? And the more leverage you can use in a situation like that, by buying a home that's maybe $750,000 instead of $500,000, that's pretty huge because that then sets you up for greater success in the future. That's how you get to that point maybe 10 or 15 years away where then you do get to go do a 15-year mortgage on a forever home. 

 

EMILY BIGHAM: Right, and you can refinance. So, I mean, we've talked a lot about what's happened the past couple years and what's happened within 5, 10, 20, some of the generational gaps and-- but where do you feel the real estate market is going? What's the future? 

 

JOSH CHAPMAN: So this is one of those ones where it's so location-specific, right? And so I can-- I definitely have opinions about-- well, I got opinions about everything in real estate, right, but-- as you know because we talk about it all the time. But I think for the broader market, we're in a really good spot now, and I know there might be some people listening who are probably thinking like, oh, I mean, of course, the real estate agent thinks that it's a good time to be in the real estate market, right? I mean, yes, of course, I am biased. 

 

However, because I am in this, and I do pay attention to it so much, and I enjoy looking up various data points, and information about the housing market, things like that, it's-- what we're seeing right now is so wildly different from what we saw in 2008. And I think that's-- I think you have to almost go backwards a little bit before you can start thinking about the predictions forward, right? And so in 2008 and everything that led up to it, you had a ton of people buying homes they couldn't afford. They were getting loans for homes that nowadays they couldn't even come close to buying. 

 

It wouldn't even be a consideration. They couldn't even write the offers on these homes because no lender would give them a preapproval for it. So you had prices that were going up. It was very artificial. The prices were only going up because they were getting pushed up by fake buyers, essentially. 

 

EMILY BIGHAM: But then really quickly by 2008, you mean the 2008 housing crisis, where there were a lot of subprime mortgages, people basically allowed to buy-- I just-- 

 

JOSH CHAPMAN: Yeah. 

 

EMILY BIGHAM: For those who aren't aware of what happened in 2008, we're a little older now than we pretend we are. 

 

[LAUGHTER] 

 

JOSH CHAPMAN: Yeah. Yeah. Well, and so you had a ton of people buying homes that they couldn't afford, and there was very little equity in these homes. 

 

EMILY BIGHAM: Right, but they didn't know they couldn't afford them. 

 

JOSH CHAPMAN: Well, you'd be surprised. 

 

EMILY BIGHAM: I mean, lenders-- 

 

JOSH CHAPMAN: Yes, it was-- well, it's almost like with-- and you can still find this with auto, and auto loans, and stuff. You could just call somebody, and, I mean, we're talking no doc loans. You're not giving any documents or very, very little. You're basically just saying, yeah, this is my income, and, yeah, this is-- yeah, I mean, this is what I make. 

 

Sure. And the lender says, OK, here's your money. And everybody was doing that because they saw home prices going up and going up quickly, which is why I get this question a lot because home prices are appreciating quickly right now. It's very, very different. 

 

And so they're thinking, whatever. If I can't afford it, it doesn't matter because I'm going to make money off this in a year or two years. Everybody thought they were going to be a house flipper, and everybody was buying multiple homes, investment properties. Everybody had these grand ideas of just making tons and tons of money off of every house they bought, so they didn't really care about over-leveraging or buying homes that they truly could not afford. 

 

And now we have the complete opposite, right? Now we're seeing some of the most competitive situations across the country that we've ever seen, and a lot of times the folks who are winning these competitive situations are the folks who have the most capital. They are able to afford these homes 10 times over, and you have a lot of equity. And so the-- I know that in the country, I think in the US, 38% of all homes right now are owned free and clear so no mortgage, right? That's a wild-- that's a very, very high number. 

 

And then there's almost 18 million residential properties that were considered equity-rich, meaning at least 50% equity. And so there are more homes with more equity right now than ever before. So even if prices were to fall 2%, 3%, 4%, 5%, these people aren't hurting. 

 

These are not people who are going to have to scramble to sell and foreclose on their homes because if they sell them, even if it's at a lower price than what they might get today and they sell it for 5% less six months from now, they still make money. The bank doesn't have to take their house. They didn't make as much money as they could have, but the bank doesn't take their home. And if you don't have a ton of these foreclosures and stuff like that happening, it-- the market is a better place for it. 

 

But the other thing is that there is-- we have had decline in inventory for years and years, and that's why prices are going up. They're not going up because you have these basically nonsense loans being given to anybody with a heartbeat. They're going up because of supply and demand. I mean, it's the purest example of that kind of basic economics lesson of supply and demand. 

 

And so that is-- I think that things are going to keep going up. I think that the best way to look at it is very location-specific. Again, talk with a good local agent and lender, but things would-- the amount of homes that would have to hit the market all at once to have any impact on price right now, because of how incredibly high demand is and how wildly low supply, is just almost unfathomable, and so I think that predictions for at least our local market, very, very strong. 

 

And then I think for the country as well with people being able to work from home a little bit more than before and being able to move to a lot of these places that have more affordable cities and things like that, it's going to probably be pretty strong for a while. And what I'm hoping-- this isn't so much as a prediction as it is a hope. I just-- I hope that we're just going to start seeing homes selling for maybe 2% or 3% over ask in some places, instead of 10% over ask almost every time, and competing with just a handful of offers, as opposed to 15 or 20. And I think we're actually already seeing that a little bit, and so I think that's going to continue. But I think it will still very much be a seller's market. 

 

EMILY BIGHAM: So sellers market. So basically, as far as predictions, because sometimes you'll read we're in a housing bubble, or people try to compare to 2008, or they talk about inflation, this and that, so what you're saying is, I mean, it's supply and demand. So there isn't as much supply. The demand is still going to be high. 

 

However, maybe it'll be less of-- the spikes and the rises and falls, it'll be less dramatic and more just, OK, yeah. So, I mean, what advice do you have for any service members or veterans out there who want to buy a home? They need to buy a home. They have a VA loan. What should they do today? 

 

JOSH CHAPMAN: All right, number one thing, and this goes for whether you're using a VA loan and anyone. If you are even considering buying a house, speak with a loan officer immediately, right? And this is not just-- 

 

EMILY BIGHAM: Talk with a loan officer. 

 

JOSH CHAPMAN: Yes, and it's not me trying to plug NFCU. I'm not trying to push people. I'm not saying, hey, call NFCU right away. The reality is that is what you have to do. You have to do that because if you don't do that, you have no way of knowing if the homes you're looking at online, on whatever website you choose to look at homes on, you don't know if you might actually be able to afford those. 

 

And either one of two things is going to happen. You're going to get to the point where you want to go see them, and you're going to see it, and what if you can't afford it? All right, well, that's never a great feeling, or you might go out and look homes, and you might get very disappointed in the homes you see because they're not homes that you want to buy. And then you might say, oh, never mind. I'm just going to give up, but you might actually be able to afford more. 

 

And so it's important to just know where you fall on that price spectrum and what you're comfortable with because once you know what your monthly payment can be and what you're good with as far as monthly payment goes, then you can really start looking. You bring that monthly-- you bring that preapproval to an agent in your market and you say, OK, here's what I'm comfortable with. Here's the type of stuff I want in the house. Where do we start looking? 

 

And I think specific to veterans, though-- and I know I touched on this before, but I think it is really important. I think when it comes to using a VA loan, the really important way of thinking about it is not so much first thinking about the benefits on your side, right, on the buyer side of things. Try to first understand why the selling side might look at it as a disadvantage right up front. That's what your agent has to communicate to the other side. And if they do it from the beginning, that's how you'll set yourself up for success. It's the only way to win is knowing what the other side-- knowing what your competition is doing and knowing how the other side is going to think about it when you present your offer. 

 

EMILY BIGHAM: Well, I mean, that's classic how to win. 

 

[LAUGHTER] 

 

JOSH CHAPMAN: Yeah, but you're a very competitive person. 

 

EMILY BIGHAM: You've given such great advice, and I really appreciate you going into detail and really explaining how everything leads up to this really pivotal point in a service member's life. And I think just understanding the background, just you can kind of cut out the noise that you read in the media. You can cut out the noise that you hear from people who think they know everything but they don't. But also that's a lot of stuff to have to think about constantly, and with the market changing as much as it is and how you have to just be ready to jump on houses when they come up, I think it would be best to just find a real estate agent. 

 

JOSH CHAPMAN: I will add one more thing too. This is something I tell every veteran that I work with. We talk about the financing, appraisal stuff. If you know going into it that you are going to be making the best offers you possibly can, that you are the most comfortable with, and there might still be agents on the other side who just don't get it, right, and you know that that's out of your control, and that it might happen, you're going to be a lot happier going through the process because, eventually, you are going to get through. Sometimes it's the first house. Sometimes it's the third or fourth house. 

 

And as long as you know that what you were doing, and the agent you're working with is rock solid, and they understand the VA loan, and how to convey it to the other side, even if you don't get the first few, you are going to find a good agent on the other side who does get it and who will understand why your loan is not the disadvantage that maybe some of the previous ill-informed agents-- maybe what they did not get. So don't be discouraged. It's still very much possible. Definitely don't avoid getting into the market because of stories you hear about VA loans. Don't avoid trying to make offers just because of the potential for issues. Definitely still get out there and just find a good agent who will make it happen, and it will happen. 

 

EMILY BIGHAM: I like your optimism. It makes me happy. 

 

[LAUGHTER] 

 

All right, last question. 

 

JOSH CHAPMAN: That's part of my job. 

 

EMILY BIGHAM: Last question before I let you go, and it's rapid fire. You can only answer with one word. My condo-- rent or sell? 

 

JOSH CHAPMAN: Sell. 

 

EMILY BIGHAM: [GASPS] Great. 

 

JOSH CHAPMAN: I know I'm going to get-- see, but what a real estate agent thing to say though, see, because without being able to explain why. 

 

EMILY BIGHAM: I don't want to hear it. I don't want to hear it. I don't want to hear it. 

 

JOSH CHAPMAN: I know you don't. 

 

EMILY BIGHAM: I don't want hear the why. 

 

JOSH CHAPMAN: Sell. 

 

EMILY BIGHAM: I trust you. 

 

JOSH CHAPMAN: Sell. 

 

EMILY BIGHAM: Oh, OK, well, that just-- all my anxiety just left and I'm going to sleep well tonight. All right, well, thank you so much, Josh, and, again, I really appreciate you spending time with me this morning. And as always, talking real estate, I love it. It's awesome. 

 

You just know so much about the military and veterans, and you do so much for them. I really appreciate all of the hard work that you do and put into finding them homes, so thanks so much. 

 

JOSH CHAPMAN: Thanks [INAUDIBLE]. No, thank you so much for having me on, and that's really kind of you. I feel like it's always one of the most rewarding things for me, being able to help veterans get into homes. And with parents who were veterans and having to move around so much as a kid, I know how important it is to have a place to really call home, so it's the least that I can do to try and help in any way I can. So hopefully this was good, and if-- I would love to come back on if anybody has any good questions later because real estate's always changing. 

 

[MUSIC PLAYING] 

 

MAN: Navy Federal Credit Union is federally insured by the National Credit Union Administration. This podcast is intended to provide general information and shouldn't be considered legal, tax, or financial advice. It's always a good idea to consult a tax or financial professional for specific information on how certain laws may apply to your individual financial situation. 

 

References to and participation with the military community does not constitute organizational endorsement. Navy Federal is an equal housing lender. Navy Federal Credit Union, our members are the mission.