We’ve all found ourselves at a familiar crossroads; the lease on your place is up, but what’s next? Should you re-sign? Try to find another spot? Look into buying a home? As a single woman in her late 20s, I had talked about buying my own home for years, but hadn’t made the leap. I knew Charleston was going to be my home for the foreseeable future and I was really tired of putting on appropriate attire to let the dog out at 7 a.m. because my yard didn’t have a fence. So what was preventing me from taking the next step? The unknown. Because I love an action plan and want to help others facing the ‘unknown’, I’ve put together tips and tricks that cover the basics of the home-buying process.
(Note: There are variations of this process for everyone. Check out the links to take you to the next level of each subject, if you’re really ready to enter the rabbit hole.)
1) Select an Agent
Find an agent that you immediately feel comfortable talking to. Some are buyer’s agents, some are seller’s agents, and some do both. Obviously in this situation, you’re looking for someone to handle your purchase, so you’ll want a buyer’s agent. There’s nothing wrong with ‘interviewing’ the agent to see if they’re a good fit. You’re going to be spending the next few weeks/months communicating with them on an almost daily basis. To feel even more secure in your decision, read more to understand how they get paid. Make sure they communicate effectively from the very beginning and are able to reasonably answer your questions. A great agent should have a blank buyer’s agreement for you to review, an agency agreement, an agency disclosure, and references to back up their previous achievements- at the first meeting. (Disclosures and agreements vary from state to state).
2) Obtain a Pre-Approval
Pardon? When do we get started looking at houses? Yes, in this market, that comes later. Your agent should have access to credible lender references. Interview those lenders just like the agents and they will provide you with a pre-approval letter for your mortgage, along with a good idea of your goal for a down payment and interest rate qualifications. The way most of the homes are moving in the Charleston market (an average of 62 days on the market, YTD), a lot of seller’s agents are requiring a pre-approval letter to be submitted with the offer. This makes sense, don’t you want to know how much house you can reasonably afford before you start looking?
3) Start Your Home Search
You knew we’d get to the fun part. Work with your agent to set up a search or portal through their Multiple Listing Service (MLS). A lot of the information you find on your own, through searchable real estate sites, can be inaccurate and out-dated. You hired a pro, now use them! Once you’ve selected your top homes, schedule with your agent to see them. We can typically work through 8 homes on a good weekend day, and 3-4 homes during the evening. As agents, we are used to working evenings and weekends, so we work with your schedule. You’re just as likely to receive an email from me at 9:45pm on a Friday as you are 11:30am on a Sunday. Realize that some homes require 24-hr notice to view and others have restrictions on times that the home can be shown. Use that time to do a drive-thru of the neighborhood before the showing. You can never be too prepared when it comes to buying a home.
4) Select Your Favorites
Maybe you loved 2 of the 8 homes visited. Review the details (Seller’s Disclosure, HOA fees/ regulations, Flood Insurance estimates) your agent will send you on each home, and if you want to go see those 2 homes again, schedule a second appointment. As I mentioned before, the average home currently stays on the market 62 days in Charleston County. This differs in location and price range, but if you’re set on a home, make that offer. We’ve all lost that one home we wished we would have jumped on sooner. Viewing comps (comparable home information) can help you come to an offer price and a better understanding the home’s value.
5) Start Negotiating
Remember the blank buyer’s agreement your agent provided you at your first meeting? Well, now is the time to fill it out with your agent. They should review each section with you, until you feel comfortable about what you’re signing. Contracts are not beach reads, y’all. Once completed, the documents (also normally includes a Seller’s Disclosure and any addendums), are sent to the seller’s agent for review. A deadline is part of the buyer’s agreement, so you’re on your toes until you hear back. Believe me, it’s just as stressful for us agents!
6) Keep Negotiating
You make an offer, they accept, everyone cheers! This is often not the case, but would you really expect that in likely the biggest purchase of your life? There are many scenarios that put you through contract negotiations, so I won’t go through them here, but know that this is where that credible agent really comes in handy (again). When you’ve come to acceptable terms with the seller’s agent, this called having a ‘ratified contract’. Now you can cheer… and wait for closing.
7) Go Back to Your Lender
Were you impressed with the lender that provided you with your pre-approval letter? Chances are they will be great to work with on acquiring your mortgage, as well. Shopping rates is fine, but read the fine print of that contract you ratified, most have a deadline for applying for the mortgage to get the home closed quickly.
8) Find an Attorney
As Realtors, we’re pretty great at writing a contract, but we are NOT attorneys. You will need to reach into your agent’s magical bag of credible references and find a closing attorney that will work closely with your lender and agent to guide you through the rest of this process. They get to do all the exciting stuff like, research a deed, file a title, and make lots and lots of copies.
9) Inspect the Home
Another part of your ratified contract (man, for an approximately 8 page document, that thing holds a lot of weight!) is the Due Diligence section. Your agent should have access to credible home inspector references; along with termite inspectors in SC, which is required. The home inspector will give you all the details of the home you’re preparing to buy. From this inspection, you’re likely to draft a Repair Addendum with your agent, to discuss any repairs and/or negotiations. The termite inspection will give you a qualified CL-100 letter for closing.
10) Apply for Homeowner’s Insurance
Your agent (BFF at this point) can provide you with those credible references all over again for homeowner insurance companies. There are going to be a lot of questions about the home during this application process. Don’t hesitate to ask your agent the most mundane of questions. Yes, I know the distance to the closest fire station from your home.
11) Set a Closing Date
Your loan is well on it’s way to final approval, the repairs are being done or you’ve settled on a financial exchange for what’s necessary, you’ve read your ratified contract before bed every night for the past few weeks- sounds like you’re ready to close! In the ratified contract, you selected a ‘Close Date’ to aim for, but if you’ve read through everything to this point, you realize not everything sticks to a strict schedule. Work with your closing attorney to find a date that works for you, your lender, and the sellers to close (us agents will move mountains to be there, so don’t worry about us!). This is also where all of your closing costs come together. Estimate sooner than later, so you don’t feel ill-prepared.
12) You’re Home!
Go ahead, breathe a sigh of relief. You have the keys and a real-life mortgage! In Charleston County, you’ll want to apply for your 4% primary resident tax rate ASAP, transfer your utilities, and setup preferred technicians to provide regular service to your home for things like your HVAC system, termite bond, and fireplace (yes, we use those once a year here).
Other helpful links:
Why Should You Use a Realtor (if you read this post, you should already know, but just in case)
5 Tips for First-Time Homebuyers (the pre-pre-approval process)
If you’re ready to start the conversation with an agent, call or email me and let’s get started. I love working with first-time homebuyers and connecting them with the home that meets their needs, while making them feel financially secure with their decision to buy. Hear from some of my clients on their experience with me representing them.
(Referral link: http://www.lowcountryloveletters.com/emily/)
Emily E. Gildea
Realtor, Dunes Properties