Buying a Home in North Carolina
Congratulations on taking the first step in the purchasing process – this is an extremely exciting road ahead! Although at times it can be stressful and overwhelming, buying a home is one of the most valuable investments you will ever make and will be both fun and exciting as you go along.
This is where I step in. Hi, I’m Amanda Evans-Marsh, your local real estate expert. Buying a home is no easy feat, and since my services are paid by the seller-there’s no reason NOT to hire a buyer agent!
There is no “one size fits all” when it comes to the real estate closing process. Every state varies in its closing requirements, so closing on a home in North Carolina will be very different than closing in other states (even from North to South Carolina).
Step #1: Hire a Full-Service Real Estate Agent
If you are considering delving into the home purchasing process without a real estate agent, I strongly advise against this. I’m not just saying this because it’s my life’s calling-It’s imperative, especially as an inexperienced buyer. Here’s the best part about being a buyer: working with a real estate agent that exclusively works for you IS PAID FOR BY THE SELLER! It’s a total no-brainer.
Speak with friends and family and conduct thorough research prior to reaching out to a potential real estate agent. Read their online reviews on Facebook and Google, check the content on their website and Facebook profile, and ensure that your values align prior to taking this important step. You will spend a lot of time together over the next few months touring homes and working through negotiations, so you want to ensure that you hire someone you trust and work well with. It is perfectly acceptable to interview more than one agent prior to deciding who to hire.
Buying a home is one of the most important transactions you will ever make. A lot of money is at stake and you will put yourself at major risk of leaving considerable cash on the closing table if you do not work with a real estate agent. It is also important that you do not hire a discount agent. Most discount agents do not have the tools necessary to expedite the buying process and won’t provide you with the full service you need. A full-service agent, on the other hand, will try to make the purchasing process as smooth and seamless as possible and will provide insightful knowledge about neighborhoods, school districts, average home prices in the area you wish to buy, current market conditions, etc.
They will also put you in contact with other professionals who are involved in the purchasing process, such as a trustworthy mortgage broker, a reliable home inspector, a handy closing attorney to prepare all legal documentation and other applicable paperwork. There is a great deal of legal jargon you will be expected to understand. If you do not work with a real estate agent as a buyer, I can assure you the seller’s agent will not have the time to explain the processes to you-because their responsibility is to the seller. Working with a full-service real estate agent will help guide you through the paperwork and will ensure you aren’t signing anything that you are not 100% comfortable with.
Step #2: Get pre-approved for a mortgage
Please note that getting pre-approved is not the same as getting pre-qualified. Pre-approval is a fairly easy process and will tell you exactly how much house you can afford based on your income, expenses, and more. Pre-approval carefully reviews your credit and is far more thorough than pre-qualification, which only provides a rough estimate of how much you may be able to afford.
Will getting a mortgage pre-approval affect my credit?
Yes, obtaining mortgage pre-approval will knock your credit down a few points because the lender will run a hard credit check. But bear in mind that this is an extremely important step in the purchasing process and one that will set you apart because it helps sellers know that you are a serious, motivated buyer and have the mortgage backup information to prove it. Additionally, most real estate agents will require that a buyer obtain mortgage pre-approval (unless they are a cash buyer) so that they will know the price range in which they can afford to buy.
PRO TIP: Stay away from purchasing on credit during the home buying process. The lender checks your credit multiple times, even the day before closing. Don’t be the one that can’t close because you financed new furniture or a new car!
PRO TIP 2: DO NOT, I repeat, DO NOT change jobs during the home buying process! This will affect your purchasing process and can even prevent you from closing.
Step #3: Determine what you’re looking for in a home within your budget
Let’s talk practicality. I advise that you be as practical as possible when considering what the absolute “must-haves” are in your future home. Although having that extra bathroom or a giant master suite is great, it might not be in your budget.
There are many different options to consider when purchasing a home, so I hope this brief list will be helpful when making those decisions:
Home Logistics:
Do you want a home with multiple acres and plenty of land? Or, are you comfortable with something on less than an acre and close to neighbors? Is a driveway a must-have? Do you prefer a condominium/apartment over a house?
Location:
How far are you willing to travel to work? Is it important to be close to restaurants and nightlife or do you prefer to be in a secluded area? Are there certain school districts you want to live in? Are you comfortable with city traffic noise or do you want to be in a quiet neighborhood? Do you want to live in an area with families and young children or do you prefer to live near a younger or older age group? Location is the most influential factor on your bottom dollar spent.
Size and floor-plan layout:
How many bedrooms do you need? How many baths? Is a finished basement a must-have (did you know those aren’t common in our area)? Ranch or two-story?
Amenities and upgrades:
If you are looking for a condo, are their certain building amenities you are looking for (such as a pool, gym, etc.)? If you are buying a home, do you need a washer/dryer/refrigerator (these are called “personal property” and not included unless negotiated. Do you want a new kitchen? Is hardwood flooring throughout a must-have or are you comfortable with carpeting?
Step #4: Search for a home
Your real estate agent will be hard at work researching homes on the market and scheduling showing requests with the seller’s agents. You are welcome to assist in this process by looking at homes in your price range online and sending the details to your agent if you find any that you are interested in viewing. Some homes online will be marked as contingent and it's likely you'll want to skip over these while keeping an eye on them at the same time. They are under contract and not available for purchase. Yes, back up contracts are a “thing” - but I can assure you there are more homes out there. Don’t get hung up on the one that’s taken.
Soon, it will be time to view homes in-person. I strongly advise being open-minded throughout this process and taking the time to carefully walk through each home. I also recommend keeping a running list on your phone of what you do and don’t like in each home you view. Hated the wall-to-wall carpeting but loved the recessed lighting? Be sure to jot that down. You will be touring various homes during this period and it is easy to get confused so it will be helpful to have a point of reference.
Remember, many of the homes you tour will be occupied by the sellers. Try to envision the home with your items in it, especially if it’s empty. Will your sofa realistically fit? Can you see past the seller’s collection of china and envision your own farmhouse table there instead?
PRO TIP: Take pictures on your appointments so that you can remember discussion points post-tour.
Step #5: Find your dream home and make an offer
Congratulations on finding the home of your dreams! Prior to putting in an offer on the home, your real estate agent will conduct thorough research on other homes that have closed in the neighborhood. If the home you wish to purchase is listed for $250,000 but most of the homes in the area that are similar in size recently sold for $220,000, let’s talk about why and where we want to land price wise. Alternatively, if most of the homes sold closer to $275,000, you will know you are getting a great deal by putting in an offer at the asking price of $250,000.
Step #6: Put in a purchase offer and begin negotiations
Prior to putting in an offer, I recommend reviewing the sample of the offer to purchase and contract documents to get an understanding of the terms and conditions both you and the seller will need to agree upon. I will be responsible for handling the negotiations and will ensure you are getting the greatest bang for your buck. Negotiating a deal can sometimes take several days (or longer) until all parties are in agreement, so I advise exercising tremendous patience during this time. Once you are under contract here are the next steps.
PRO TIP: You need to have funds available for closing (Typically 3.5-5% down at minimum, along with your inspection expenses and appraisal). Ask your lender for an estimated CASH TO CLOSE to know what you need to have available at your maximum purchase limit.
Step #7: Schedule Home Inspection
After the offer has been accepted, it’s time to schedule the home inspection and pest inspection. Unless negotiated otherwise, the cost of these inspections will be your responsibility as the buyer. However, these inspections are crucial to ensuring that there aren’t any major defects with your home.
When it’s a buyer’s market- It is also very important that you schedule the home inspection prior to scheduling the home appraisal (which is different than the inspection) and obtaining mortgage pre-approval. Unfortunately, this isn’t the case in the seller’s market.
A home inspection carefully reviews the home and searches for any defects. An inspector will review the electrical, plumbing, roof, overall structure of the home, and more to ensure that there aren’t any problems. If all goes well and there aren’t any major issues, you are ready to obtain mortgage approval. However, if the home inspection report comes back and there are more problems with the home than you anticipated, you will have the option to back out of the deal, forfeiting your due diligence funds. However, if you terminate within your due diligence period, the earnest money deposit can be refunded.
PRO TIP: Even if you find something awful in the home inspection, you are still responsible for those appraisal, home inspection, and due diligence fees. So, that’s why you want to be hyper vigilant on your tours!
Step #8: Obtain a mortgage
If you have a credit score of at least 620, decent income, and can afford a larger down payment, you will most-likely qualify for a conventional mortgage. Home buyers with lower credit, a smaller down payment, and limited income may qualify for a government loan.
A lender will almost always require a property appraisal when approving a home loan. This process typically involves examining recent home sales in the area (otherwise known as “comparables”) and comparing the sale prices to the home you wish to buy. This is why it’s SO important to talk through this with your agent when negotiating.
Using the same example I mentioned earlier if you wish to purchase a home listed for $250,000 but similar homes in the neighborhood sold for $220,000, your lender might only be willing to loan you $220,000. If that is the case, it may be your responsibility to pay the remaining $30,000 out-of-pocket if don’t want to back out of the deal and the seller doesn’t want to budge on price.
Step #9: Obtain title insurance
Title insurance is a vital component to purchasing a property because it protects both you and your mortgage lender if for any reason the seller didn’t have rightful ownership of the house when they sold it. For example, you may be purchasing the home from a single woman who didn’t realize her ex-husband still co-owned the property and hadn’t signed off on the sale. Or, maybe the seller had plumbing work completed on the home several years ago but never paid the plumber for the work. As a result of the overdue payment, a lien (debt) was placed against the house. These liens stick to a house and will become the new owner’s responsibility if title insurance is not in place.
Although the chances of these circumstances occurring are fairly slim, it is still important that you protect yourself with title insurance. Without title insurance, you could lose a substantial amount of money (or the house altogether).
Step #10: The Closing Table!
Congratulations on making it to this exciting step! Fewer days are more exciting and anxiously anticipated than closing day.
Final Walk-Through
If there were any problems that came up during the home inspection that the seller agreed to fix, the final walk-through is your opportunity to ensure that everything was repaired adequately. Here is a brief list of some items that should be checked during the final walk-through:
1. Turn on and off all lights
2. Run water in all sinks and check for leaks
3. Test all appliances
4. Check garage door openers
5. Open and close all doors and windows
6. Flush all toilets
7. Inspect ceilings, wall and floors for any signs of water damage
8. Run garbage disposal and all exhaust fans
What should I expect at the closing?
Your lender will provide a check for the amount that is owed on the home. The seller will then sign the deed, officially transferring ownership to you as the buyer.
Can I move into my new home directly after the closing?
Your contract will specify the exact date you can move in after closing. In some situations, you will receive the keys at the closing table and will be able to move in immediately. Most likely, you will have to wait for the deed to be recorded in the county in which you’re purchasing, and that can sometimes take 24-48 hours. In other situations, the seller may request 30, 45, or 60 days of occupancy after closing on the home.
Who pays transfer tax in North Carolina?
Excise tax (aka Revenue Stamps) is typically paid by the seller. When the ownership is transferred in the state of North Carolina, a tax of $1 per $500 is imposed on the property. So, a transfer tax of $600 would be paid by the seller on the sale of a $300,000 home.
How much time should I expect to spend at the closing?
A standard closing typically takes about one to two hours if both buyer and seller are in full agreement.
I can’t wait to walk alongside you in this journey. When you’re ready to begin, I’m here. Put good people in your corner, and you’re sure to win!
Cheers to new beginnings!
Real Estate buying and selling service areas for Amanda Evans, Realtor/Broker include (but are not limited to: Mecklenburg, Union, Anson, Stanly, and surrounding counties. Amanda services sellers/buyers with their residential, land, commercial, farm and estate needs. With offices in Monroe and Marshville, North Carolina, Amanda can meet you on site for an appointment at your convenience.
Amanda's Hot Areas for purchase/sale 2022: Matthews, Mint Hill, Indian Trail, Monroe, Wingate, Marshville, New Salem, Unionville, Fairview, Waxhaw, Weddington, Wesley Chapel, Peachland, Polkton, Locust, Midland, Oakboro, Norwood, and Stanfield North Carolina.
Comentarii