Moving for the Military? Your Family’s Guide to Selling Your House

Options for your home sale

You have a few different options when it comes to selling your house. Ultimately, your choice will depend on a few factors, including how much time you have to sell. If you only have a few weeks, you might be more willing to take the quickest option available instead of trying to get the most money for your house.

Not sure where to start? Use HomeLight’s Home Value Estimator to get an approximate idea of what your house might sell for. Next, sit down with your family and talk about your goals. Then, consider these options:

1. Hire a real estate agent with relevant experience

There’s a reason why 89% of sellers choose to sell with an agent. They have the knowledge necessary to sell your house for top dollar and help guide you through every step of the process. You can focus on packing and finding your next place while they take care of the details.

You should contact a real estate agent as soon as you decide to sell your house for the move, Payne says, whether you have a few months or a few weeks. Payne’s husband was in the military for 23 years, so she knows first-hand what it’s like to move between bases.

Key tips for all military sellers

Norton and Payne have the following tips for military sellers. Their combined real estate and military experience makes these key suggestions worth considering.

1. Remember OPSEC (Operations Security)

OPSEC prohibits military members from posting specific information about their movements, deployments, and job details online. Keep in mind that any trace of your military involvement in your listing photos or information can break this code.

That means you must remove any military-related items from your house before you take photos. For your personal safety, it’s also best to remove them for home tours. Keep them in a storage unit or at a friend’s place during the selling process.

2. Market your transferable VA loan terms

Norton urges his sellers to offer the option of transferring their favorable VA loan terms within the property’s marketing plan.

VA loans can be assumed by anyone who meets certain VA loan requirements. Do note that assumable mortgages aren’t exclusive to military members and veterans.

“For example, two years ago, a VA buyer was able to purchase a home at 2.5% interest. And let’s just say the interest rates all of a sudden were 7% or 8%,” Payne explains. “A VA buyer would have the ability to purchase that home and assume their interest rate of the 2.5% that’s already set on that loan.” This can be an attractive option to potential buyers as mortgage rates remain high.

As the existing loan holder, you’ll want to obtain a release of liability from the lender so that your name is no longer associated with it. Otherwise, your credit standing could be harmed significantly if the person assuming the loan makes late payments or defaults.

Military sellers offering a VA loan assumption should also consider their future home purchase entitlements. An “entitlement” is the amount the VA will guarantee to a lender on a VA loan, allowing buyers to purchase a home with no down payment in certain cases.

If the buyer is a veteran or on active duty, you’ll want to ask them to sign a Substitution of Entitlement, which frees up your remaining VA loan eligibility. If you don’t complete this step, your entitlement stays tied to the property until the loan terms wrap — making buying your next home much harder.

3. Make sure to meet the VA’s minimum property requirements

To take advantage of your VA loan, you have to undergo an authorized appraisal and meet the VA’s Minimum Property Requirements (MPRs).

Most regulations are health and safety related, including properly functioning HVAC, water, and sewage systems. Some sellers find it helpful to invest in a professional home inspector with MPR experience before putting the house on the market.

Before starting a home improvement project beyond the standard MPRs, discuss the payoffs of the update or upgrade with your agent. Their knowledge of the local real estate market can provide insight into which projects resonate most with buyers and which are not worthy of the time and money.

4. Know your military tax benefits

As a way to incentivize and reward homeownership, U.S. tax rules are set up so that most sellers won’t have to pay capital gains taxes on the sale of their primary residence. Generally, homeowners will be eligible to exclude up to $250,000 in gain, or $500,000 if married and filing jointly.

However, to qualify for the exclusion, civilian sellers must show they have owned the property for at least two years and have lived in it for at least two of the preceding five years.

Service members who relocate to a new duty station may find it difficult to meet these ownership and use tests, so the IRS has created special tax rules for military sellers.

According to the IRS Armed Forces’ Tax Guide, military members who fail to qualify for the ownership and use tests due to a permanent change in station can still exclude gain, but the cap on that gain may be reduced. In addition, they can suspend the five-year test period to meet the use test. There are restrictions: one property at a time is eligible, and there is an overall 10-year limit.

Norton encourages military members to consult with a real estate attorney or financial advisor to take advantage of these tax relief scenarios and others, including the possibility that your state waives property taxes for veterans with disability ratings.

There is also the option to deduct unreimbursed PCS moving expenses from your federal income tax returns, if you don’t use military allowances to reimburse them.

What to do if your house doesn’t sell in time

It’s not ideal, but consider what will happen if your house hasn’t sold by the time you move. Here are a few options:

1. Become a military landlord

It’s not for everyone, but plenty of service members are also rental owners. Many got into the game just like normal landlords do, while others have fallen into it due to houses not selling before their next relocation.

It might also work out for you to keep the house for a few more years if you have information that points to you returning to your original location after this station reassignment.

As military landlord life progresses, the option to offer your tenants a rent-to-own situation may prove beneficial. A rent-to-own agreement provides the tenant with an investment into their future property while creating an alternative selling solution for the homeowner.

2. Consider a long- or short-term geo-bachelor move

Military members who leave families behind at a duty station to move onto another are affectionately referred to as Geo-Bachelors or Geo-Bachelorettes, Geo-Bach for short. This situation can occur when a house fails to sell, but frequently, quality of life factors such as school disruptions, a spouse’s career, or an exceptionally undesirable gaining location are the reasons for a temporary separation.

Geo-bachelor moves are varied in every sense, from their length to their purpose. Some consider the fact that the house won’t sell an insurmountable financial burden. The costs of renting the home and adding a second house payment can be out of reach, especially if the non-military spouse cannot transfer their job to the new location.

Some moves are only temporary, depending on the length of your relocation.

3. Leave your house behind but in your agent’s care

It’s not uncommon for a military seller to have the confidence in their agent to continue the sale in their absence. You may have developed a level of trust with your agent while working together and would like to keep the continuity until closing day.

You’ll have to communicate regularly and let your agent know if there are any additional responsibilities they may pick up in your absence. For example, monitoring the house regularly and noting upkeep and safety needs.

Technology has taken real estate transactions to a new level, and in-person transactions are not necessarily a requirement. Your agent should be well-versed in several virtual platforms that facilitate long-distance sales.

“There are a lot of families that do have to leave mid-timeframe in order to get to their next duty station in time for their report date,” Payne shares. “And so we just keep the homefront going. We keep up with them.”

Reduce the Stress of Selling for a Military Relocation

For military families needing to sell quickly because of a relocation and who may not have time to deal with repairs, prep work and open houses, HomeLight’s Simple Sale platform can be a great option. We provide cash offers for homes in almost any condition nationwide, reducing the burden of making a house look perfect for possibly months on end. Receive an offer within 24 hours and close in as little as 10 days.

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You can do this, and help is out there

Avoiding a stressful PCS is a top priority for military sellers, especially first-timers. Thankfully, there are real estate experts who understand the ins and outs of your unique situation, and you have lots of benefits to claim as a result of your or your spouse’s service to this country.

Take advantage of whatever offerings you’re granted, and ask for help when you need it, and you’ll be well on your way to selling a home with confidence.

That way, you can focus on everything this next chapter of life — in a new location — has to offer.

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