To Use a VA Loan REALTOR Referral Program or Not?
As you may already know, I work with many military buyers and sellers of real estate on Oahu. Recently, we submitted an offer for a military couple relocating to Hawaii, who is using a VA loan to purchase real estate on Oahu. This couple came to us after using a REALTOR who was referred to them by a VA lender’s REALTOR referrral program.
Several VA lenders (e.g., USAA) have these programs. How they often work is that VA Buyers who do not have a REALTOR are referred to a REALTOR participating in the VA Lender program. If the REALTOR closes the sale with the VA Buyer, the VA lender is paid a referral fee of anywhere from 25-40% of the total commission. Sometimes, the VA lender will rebate a small portion of this referral fee back to the VA Buyer. The lender keeps most of it, so they have incentive to get you to use on of their preferred REALTORS.
Our VA clients told us that they were not impressed with the REALTOR referred by their VA lender, for various reasons, so they went elsewhere. Fortunately, they ended up finding me and using me as their REALTOR. It caused me to wonder what, if any, process was used by the VA Lender when selecting REALTORS to refer? I am certain that many REALTORS who participate in the program are very good REALTORS, but I wonder how many are not? Is it in a VA Buyer’s best interest to use a REALTOR from a referral service? …. the answer is ….. MAYBE.
Here is my advice to military buyers using a VA lender referral program:
1. Make sure the VA loan REALTOR has real life experience in the VA market segment.
Has the REALTOR done many VA loan transactions? Have they ever had their own VA loan? Is the REALTOR a former or current military servicemember or spouse? “Yes” answers to these questions may indicate experience and help the transaction run more smoothly.
2. Make sure the military REALTOR has quality reviews for their service and that they can provide references.
Look at the REALTOR’S website for testimonials. Ask them for names and numbers of specific client references. Make sure to contact those references. REALTORS with happy clients, who freely and pleasantly want to give a good recomendation, are your best bets.
3. Make sure your VA Loan REALTOR has the time to take you on as a client. Ask how many transactions they have going right now. More is not always better. To how many active buyers are they showing property within any week period? Showing property to Buyers is a time intensive process. Personally, I would never handle more than 3-4 very active buyers, on my own. Even so, we use a team approach, which makes working with multiple Buyers more manageable, as we intend to always maintain a very high level of service to all our clients. We will turn business away when we cannot handle it.
4. Make sure your military REALTOR is not too far away from the geography of your intended purchase of Oahu real estate to provide diligent service.
The traffic on the island of Oahu can be bad to and from certain areas. A REALTOR from another region of Oahu maybe able to handle clients in other further regions, but only with careful planning and allowances for traffic, and the extra commuting time. They should also have experience in all of the areas you see, preferrably both with buyers and sellers. It can be done, but is difficult when a REALTOR is too busy. In this case, only the client suffers. And it goes without saying, your REALTOR should have a working knowledge of the area in which you intend to buy.
In Summary:
If the REALTOR has the required experience, proven track record of quality service, and time to take you on as a client, it may be worth taking the chance on the blind referral from a VA lender to get a rebate. If not, do your research and find a good, professional REALTOR, based on the criteria above. It will probably save you money in the end.
I have more than a decade of experience with military buyers relocating to Oahu and other VA buyers on Oahu. My husband, who is also licensed and who has over 16 years of Active Duty in the USMC and is now a reservist in the USMC, and I have helped many military friends and other military buyers with VA loans on Oahu in their purchase of Oahu real estate. We are permanent residents of Oahu, since 2004, and have helped both Buyers and Sellers most areas of the island of Oahu, including areas near the military bases.
Please contact Yvonne Jaramillo Ahearn RB-20262 at 808-721-8088 for your Oahu real estate needs.