The costs of delaying or forgoing buying a Columbia SC home in today's market have become very high. This projection is according to the inaugural Opportunity Cost Report released by Realtor.com. With interest rates and home prices expected to rise within the next year, consumers could end up costing themselves more by putting off buying a Columbia SC home.
The report used data on current median existing home prices, rents, local Columbia SC mortgage rates, and estimates of property tax, and insurance rates. It also factored in maintenance costs, costs of selling, forecasts for mortgage rates, home prices, and rents over a 30-year time period.
Current market conditions give buyers the opportunity to build substantial wealth in the long-term, compared with renters and later buyers, in advance of the projected increase in mortgage rates and continuing price appreciation. The problem is, and has been for some time, inventory is low, which has many would-be home buyers – especially first timers – standing on the sidelines and missing out on potentially material financial gains.
Buying a Columbia SC Home: The Cost of Waiting
The estimated wealth an average home buyer would accrue over a 30-year period when buying a Columbia SC home totals $217,726. The report noted the penalty of waiting one year to buy is $18,672, while the penalty of waiting three years to buy is $54,879. Data shows that those buying a Columbia SC home see sizable financial benefits compared to lifetime renters.
This analysis looked solely at the financial reasons for buying a Columbia SC home, based on assumptions about rising mortgage rates and changes in home values. It's important to remember that the decision for buying a Columbia SC home is deeply personal. Potential buyers need to consider factors such as upcoming life events, job security, and potential relocation, in addition to financial benefits, because they too can have a significant impact on ownership.
Get more information as it pertains to buying a Columbia SC home in our section on Columbia SC Home Buying Tips to your right under Columbia SC Real Estate Categories.
Remember, we post tips daily to Twitter, and also on our Facebook Page. We'd love for you to check us out there too.
When you start thinking about buying a Columbia SC home, there are all kinds of financial tips about what to do and when. Things like where to buy, how to get the best mortgage rate, how to save on this and that. Heck, there's even a ton of information advising you why it's best not to even think about buying a Columbia SC home.
There's no arguing the fact that buying a Columbia SC home is the biggest purchase you'll probably ever make, which is why it's especially important to take a number of post-sale steps to make sure you protect your largest financial investment ever.
Steps to Take AFTER Buying a Columbia SC Home
The first thing you should do after buying a Columbia SC home is re-key or change all the locks on the doors and windows of your new home. You may also want to consider installing deadbolts where there are none. This may not seem like a financial issue, it will quickly become one if you have to replace a whole house worth of stolen or damaged items resulting from a burglary because someone still had a key to your new home.
Next, you should review your insurance coverage to make sure it stays up to date with your needs.
Whether you are first-time home buyer, or moving up and buying a Columbia SC home that is bigger than your previous home, it's important to adjust your life insurance coverage to cover any new mortgage debt. As a general rule of thumb, life insurance should cover 10 years of income plus any large debts or upcoming expenses. In the case of buying a Columbia SC home, that would include the mortgage, but also could include residual debts or a child's college costs.
If you put less than 20 percent down when buying your new home, you're likely having to pay private mortgage insurance. PMI rates are usually 1 percent of your loan balance, which can translate into thousands of dollars a year, depending on the size of your mortgage. This is money you never recoup, and even worse, represents real risk if the value of your home decreases.
You might want to think about pausing any 401(k) or retirement contributions and defer them towards paying down your loan. The faster you can get below that 20 percent loan-to-value ratio, the sooner you can drop the PMI.
After buying a Columbia SC home and taking possession, you also take the financial responsibility for anything that goes wrong. Home inspection or not, things do break down, and there will be general maintenance to keep your home's value from going down. Sure up your emergency savings to cover these repairs and maintenance so you don't have to use credit cards when something breaks down.
Buying a Columbia SC home is a time of excitement and hope for the future, but there are some issues you need to consider, like, what happens if you were to unexpectedly pass away? Now is a good time to review your will or trust to make sure your new home is a part of those documents and that your beneficiaries are updated and complete.
A good habit to get into after buying a home is doing a yearly review on the fiscal impact your house is having on your life and take any measures needed to make sure it's as positive and cost effective as possible.
Find more articles pertaining to buying a Columbia SC home under our Columbia SC Home Buying Tips to your right under Columbia SC Real Estate Categories. Remember, we post tips daily to Twitter, and also on our Facebook Page. We'd love you to check us out there too.
Buying Columbia SC real estate in any market can be challenging enough, not to mention trying to get through the maze in a seller's market.
The biggest challenge facing homebuyers looking for Columbia SC real estate may be finding a home to buy. The inventory of available homes for sale remains low in most areas, especially in certain price ranges. This lends to making it a strong seller's market right now.
Tips for Buying Columbia SC Real Estate Right Now
A seller's market means that buyers have to be smart and prepared if they want to get the right house at the right price. Prospective buyers should start by looking online at homes, narrowing down neighborhood choices and deciding between must-have and preferred features.
At the same time, buyers should visit a mortgage professional and get their financing in order. It's best to start that process before you start looking at homes, in case your credit needs repair or you need to pay off debts to qualify for a mortgage. In a competitive market like we're in now, having a mortgage pre-approval could mean the difference in your offer being accepted or rejected in lieu of another that may come in at the same time.
Expect to provide lots of documentation to get a mortgage. Since the recession, mortgage lenders have become much stricter about documentation, income verification and other paperwork. Well-qualified buyers can still get a mortgage, with rates for 30-year loans hovering around 3.65 to 3.75 percent. Borrowing has become a much more difficult and cumbersome process.
Check out neighborhoods you're thinking about at different times of day. A quiet neighborhood during the middle of the workday may be noisy and crowded at night and on weekends. Get out and walk the streets, talking to people who live in the neighborhood, visiting shops and restaurants and "trying out" your desired location. Drive to and from work during commuting hours to get an idea of what a typical day might be like.
Make a needs and wants list. In a competitive market, most buyers find they have to compromise on location, amenities or condition of a home. It's easier to make a choice when you know going in which features you must have and which you'd like to have but can live without when buying Columbia SC real estate. Be flexible and prepared to compromise.
Be ready to move fast. Buying Columbia SC real estate in good condition and priced right will be a challenge, as most of these types of homes sell very quickly, sometimes the first day they go on the market. You need to be ready to make a decision when you find a home you like.
Don't expect to get a red hot deal. The days of getting buying Columbia SC real estate at a discount are long gone. That doesn't mean you can't ever get a substantial discount on a house that needs work, is in a less popular location or otherwise is in less demand. But in a seller's market, there is usually very little negotiating room on price.
Understand that no house is perfect. Making your offer contingent on a home inspection is a good move, but all homes have small defects. Many sellers won't fix anything, and there is no reason for them to if there is a backup offer waiting if you walk away.
Find a way to sweeten your offer. Most people buying Columbia SC real estate can't pay all cash, but there are ways beyond price to make your offer more attractive to a seller. Have your agent ask the seller's agent if he would like a faster or slower closing. Consider whether you can waive mortgage or inspection contingencies (which does not mean forgoing an inspection), go without a seller-provided warranty or otherwise improve the deal from the seller's perspective.
Don't buy more than you can afford. Lenders will often approve a buyer for a higher payment than he or she can make comfortably. When you're calculating what you can afford to pay, remember that a mortgage payment is only part of the cost of homeownership. Make sure you're taking into account all the secondary costs involved with buying Columbia SC real estate, including insurance, taxes, lawn maintenance, condo or homeowners association fees, repairs and even furniture.
Don't buy a house you don't love. While most buyers may have to compromise on some of the features they want, they shouldn't settle for a home they don’t like. If you don’t find the right home this year, maybe you should rent and try again later rather than make a purchase you'll end up regretting. Make sure you have a really strong emotional attachment to what you want to buy, but don't let it influence your decision on offering price beyond the ridiculous.
Get more information as it pertains to buying Columbia SC real estate in our section on Columbia SC Home Buying Tips to your right under Columbia SC Real Estate Categories.
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There are some things Columbia SC home buyers need to know about this current seller's market we're in, but it's not all that bleak if you're looking to buy a home.
Although sellers are enjoying an edge with surging prices and tight inventories, it's far from all negative gloom and doom for Columbia SC home buyers.
Positive Factors for Columbia SC Home Buyers
Mortgage rates are holding in historically low territory, with the 30-year-fixed rate lower than 4 percent for most borrowers with good credit. And new programs from Fannie Mae and Freddie Mac should make it easier for first-time Columbia SC home buyers to buy a home.
To qualify for Fannie's and Freddie's mortgage programs with just 3 percent down, prospective Columbia SC home buyers must have a credit score of at least 620. They must also be able to able to prove income, assets and job status, and purchase private mortgage insurance.
Overall nationwide, the housing market is favoring sellers. Total housing inventory at the end of February increased just 1.6 percent to 1.89 million existing homes available for sale. For the second month in a row, unsold inventory is at a 4.6-month supply, which is below what is considered normal for a healthy market.
Competition between regular Columbia SC home buyers and investors is decreasing, with home prices climbing and with fewer below-market distressed properties for sale. The share of home sales to institutional investors and all-cash buyers dropped to four-year lows in 2014, despite a quarterly increase in the fourth quarter.
A recent study by the National Association of Realtors found that rents are still climbing. The study also found that renters are spending about 30 percent of their wages on rent, compared to homebuyers who spend below 15 percent of their wages on a mortgage payment.
Despite low inventories, Columbia SC home buyers are picky about the condition of properties for sale and expect homes to be move-in-ready. Buyers don't generally want to assume any risk with properties that need work, particularly first-time buyers with limited cash resources.
So even though it is considered a seller's market, Columbia SC home buyers still have an edge in many categories, unlike many seller's markets we've seen in the past.
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