Buyers Information
Why Hire a Realtor®?
The home buying process is a very exciting time! But, whether you’re a first-time buyer, repeat buyer or investor, most buyers will have concerns. After all, a home is probably one of the most expensive things you’ll ever buy.
Buying real estate is not just a financial decision, but also an emotional one. However, it doesn’t have to be complicated. Hiring a realtor who knows how to write clean contracts and negotiate on your behalf will help guide you through the entire process all the way to the closing table and give you piece of mind.
Getting Started
Before starting your home search, you should check your credit report. If there are any inaccuracies or mistakes, you’ll want to dispute them as soon as you can. Loan qualifications vary, but typically the minimum credit score requirement is 620. Check online for sites that offer free credit reports, or click here for FreeCreditReport.com.
The Budget
Talk to a few mortgage lenders about what you can afford, and what you’d like to spend. They’ll need financial records (pay stubs, W2s, statements, etc.) from you and all co-borrowers. After analyzing your income/expenses and running your credit report, the lender will give you a borrowing limit with a “Pre-Qualification Letter.”
It’s important to remember that just because you qualify for it, it doesn't mean you NEED TO borrow it. Ask about your monthly payment, including the principal, interest, property taxes, and all insurance premiums, to make sure you’re comfortable with your monthly payment. Don’t forget to factor in utilities and other expenses.
The Down Payment
Today, there are more options for home buyers than there used to be. Where most lenders used to require 20% down, today there are mortgage products that require as little as 3% down. However, you may have to pay Mortgage Insurance (MI) with less than 20% down, so make sure to ask your lender for specifics on how to cancel the MI.
The Home Search
After contacting me here, I will create a personalized search profile for you in my local MLS where you’ll have access to thousands of homes for sale in the Charleston area. This will give you priority access to new local listings, since online sites like Zillow can take 24 hours or more to update their info after a realtor enters a new listing. In our aggressive market, that’s too long.
Once I set up your profile, try to educate yourself about the local market and determine which areas of town you like. Make a list of your basic needs in your next home, as well as any neighborhood amenities you’d enjoy.
After you narrow down your priorities, it’s time to make appointments to see your favorite homes. If you find a home you like, we’ll compare the prices of recent sales to determine what would be a reasonable offer, and then write up a contract.
The Contract
Once you submit an offer, the seller may decline it or counter with another offer. Negotiations sometimes take days before all parties can agree to the terms, at which point the contract is “ratified.” In addition to a purchase price and closing date, the contract also includes deadlines to apply for financing, submit earnest money, complete inspections, etc.
Earnest Money
This is a deposit you give to your attorney to show that you are serious and have made the offer in good faith. It’s typically 1-2% of the purchase price (though it varies depending on the terms in your contract). Failure to deposit the earnest money by the due date will place you in default of the contract. If all terms of the purchase contract are met, your earnest money is usually applied to your down payment at closing.
Homeowner's Insurance
If you plan to finance your home, you’ll be required to purchase home insurance, and in some cases flood insurance. You’ll need to apply for coverage soon after your contract is ratified, since your lender will need this information to determine your payment.
The Closing
Once your loan has completed the underwriting process and all terms of the purchase agreement have been met, you’ll meet at your attorney’s office to review and sign all the legal documents. Then, you’ll receive a copy of all documents with the keys, and the home is yours!