The Reality….USAA & Navy Fed


USAAThis past Sunday I was sitting an open house at my new listing, and was prepared for the wave of buyers that would visit with the hopes of finding their next home.  Inventory is virtually non-existent in this neighborhood, with homes in this price range selling in just a matter of days. While my main focus was selling my new listing, I was also hoping to pick up a few new clients.  I always ask visitors if they are working a Realtor, and sometimes ask them how they got connected with their Realtor.  Two different couples I spoke with last weekend told me they were referred to their Realtor through USAA’s “Mover’s Advantage” Program.  Curious to identify other sources of referral business, I visited their website to get a little more info.  The basic gist of USAA Movers Advantage program is providing loans and referring USAA members to Realtors who have registered for this program.  When the deal closes, the buyer/seller is credited a maximum of $1500 per transaction.

Here’s the question that should raise a red flag….why would a lender pay up to $1500 to sellers when they close escrow on their home?  Think about it…the lender normally does not make money from the seller, and then the lender is going to credit the seller up to $1500!?!?!  Here’s the skinny, and yes, the lesson again is “nothing in life is free”.  With USAA’s Mover’s Advantage Program, the Realtor representing the buyer/seller pays a 40% referral fee off the top of their commission to USAA.  USAA then pays the buyer/seller a maximum of $1500 out of the 40% referral fee they received from the Realtor.

My issue is not with the exhorbitant referrals fee, as lots of agents are agreeing to pay exhorbitant referral fee.  My issues is that USAA says they are referring you to top agents, and that’s just not the case.  When you register as a Realtor for the program, they do not request any information related to your productivity.  USAA does not confirm agents have done or do business in the areas the agents claim to be “specialists”.  Some of these agents are BRAND NEW agent who have not done any transactions.  There are some great agents who don’t need to severely discount their fees, but again my issue is not with agents paying an exorhitant referral fees, I just want USAA borrowers to know how this systems works.  For Example..

Sale Price                                   $645,000 (Median Oahu Price)

3% commission                          $ 19,350
40% to USAA                            $ 7,740
USAA Credits Buyer             $ 1,500
USAA Pockets                           $ 5,240
The few USAA clients that I’ve talked to since my open house were pretty shocked when I explained how the Mover’s Advantage program works. One of the buyers was not at all happy with the Realtor that was referred to them through USAA, so today I offered my services to the buyer including a $1500 closing cost credit.  Tonight, I have a new $700,000 buyer!  Once they agreed to use my services, they told me they wanted me to be their Realtor the day we met but had been enticed by the credit.

When the local Realtor get paid the full commission, the money will most likely be spent in the local economy.  With USAA, not sure the are spending any of the money locally.  Out here in the middle of the Pacific Ocean, always best to support local businesses whenever possible.

If you are working with USAA or Navy Federal and are enticed by their “credit” incentives, please give us a call!  We will most likely meet and beat their offer, and with over 2 decades of real estate sales experience, our real estate services will meet and exceed your expectations. Seriously!!?!?!?  Are you waiting from prices and interest rates to rise??
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