Columbia SC home buying is competitive. Jockeying for position has some purchasers using a bold new tactic: personal letters sent to the seller of the home they want. Let's look at why this phenomenon exists –- and whether it's right for you.
Columbia SC Home Buying Becomes Personal
Most real estate agents agree it's rare today for buyers and sellers to meet during the home buying process. We live in a society of texting, emailing and shrinking personal engagement. However, when a seller receives a heartfelt, impassionate letter from a buyer it "humanizes" that person in the seller's eyes. Such a letter is often accompanied by the ages of their children – even a family photo. It's all designed to tug at the seller's heartstrings in the hope their offer will be accepted over others vying for the same house.
Agents say while these efforts don't always work, there are some sellers who are swayed. Home sellers form a strong emotional bond to their homes and like the idea of selling to someone that will feel the same way. Sellers who've raised a family in the home have a strong sense of attachment and can be influenced by a buyer who also has a family.
However, some home sellers make decisions purely on financial or economic reasons. They're the ones looking for the highest offer, the greatest likelihood of credit approval and quickest loan closing. Still, agents say, every seller is different. Sellers sometimes make decisions not based on financial issues but emotional reasons. Some sellers actually accept a lower offer and turn down a fast closing date because they identified with their buyer.
In today's Columbia SC home buying market, usually the two most important factors to consider are price and terms. If a home buyer can't make those two items pleasing to the seller, a deal probably won't get made, and an emotional appeal will have little bearing. There are exceptions, though, and some agents cite cases where a seller rejected a higher offer from an investor who planned to rent the property in favor of a family who planned to live there.
Consider the following as to whether the letter-writing tactic may work for you.
Can you offer a price that will get the seller's attention? If so, your family may have an advantage if you can convince the seller that you will be "faithful stewards" of their home.
Will the terms work for the seller? The loan closing date, any contingencies or other parts of the contract may matter to the seller as much as the sales price. Have you met that criteria? If not, then the emotional aspect of the deal may not mean as much as you hope.
Have you done everything you can to convince the seller that you have every intention of closing the deal? Get pre-approved for a mortgage and make sure you have all the necessary down payment and closing costs available.
Are you making a large enough down payment? In the seller's eyes it's an indication of the buyer's financial strength. A small down payment may be worrisome and may lead to other questions about whether to accept your offer.
Are you prepared for any potential surprises a home inspection may reveal? If there are issues important enough to restart negotiations, the seller may want to find out how emotionally interested you are in order to reach a agreeable solution if there's a problem.
Tread lightly if you really want the home. Remember the market is competitive. That's why you considered writing an emotional appeal in the first place. The seller probably has back-up contracts – or at least options to consider – if you hesitate or fail to meet your end of the deal.
For more Columbia SC home buying tips, check out our other articles in the Home Buying section to your right just below Columbia SC Real Estate Categories. And be sure to look us up on Twitter and Facebook.
Growth in the Columbia SC economy was sluggish during the last quarter of 2015, contributing to the overall U.S. economy which ended with a 0.7% annual rate. Economists say the slowdown was due, in part, to cautious consumer spending, reduction in businesses making investments and stagnant exports to other parts of the world.
Columbia SC Economy: What's Ahead?
While the fourth quarter results weren't altogether unexpected, they have raised concerns about the future. Still, most economic experts expect a return to more positive results by the end of this quarter.
Government forecasts had predicted 2% annual growth in the gross domestic product (GDP) for the third quarter of 2015. Instead, the economy grew less than half of the anticipated rate, representing the lowest expansion since the first quarter of last year.
Government economists say the disappointing fourth quarter results are temporary and expect GDP growth to return to a rate of 2.5% to 3% by the middle of 2016. Those expectations are based on improved consumer spending and continued job growth. Consumer spending during the last quarter of 2015 dipped to an annual growth rate of 2.2%, down from a 3% rate the previous quarter. Somewhat alarming was the reduction of spending on both durable goods, like automobiles, and nondurable goods, such as clothing. Given the holiday gift-giving season the results were surprising.
Since consumer spending makes up roughly two-thirds of all economic activity, most analysts are looking to strengthening employment growth to bolster the first quarter of 2016. There are concerns that global issues such as China's shaky economy and falling oil and stock prices will continue to adversely impact the U.S.
In addition to consumer spending, a sharp drop in exported goods also contributed to the weakness of the last quarter. A stronger U.S. dollar has increased the price of goods, but made them less competitive in overseas trade markets. Business investment spending also had a negative impact. Falling from a 5.3% annual growth rate to 1.8%, spending on structures mirrored a drastic drop in oil and gas drilling and exploration.
On a brighter note, new home construction enjoyed an 8.1% annual growth rate. That will provide needed housing inventory for spring home shopping in the Columbia SC economy.
The overall growth of the economy in 2015 was 2.4%, equal to the growth of the previous year. Economists predict 2016 will see growth in the 2% range. While some say it's possible we'll see a recession this year, most agree it won't happen.
The Federal Reserve in its most recent meeting issued a cautious look at the U.S. economy. They left interest rates unchanged after having raised short-term rates in December. That could be an indication the Fed is rethinking the planned rate hikes this year. The weakness of economic growth, lower inflation and global economic impact may have gotten the Fed's attention.
Another bright spot was employment growth. The economy added roughly 284,000 jobs per month during the last quarter of 2015, bringing the year end unemployment rate at a low 5%. This, of course, is important because with more Americans working, more are considering purchasing their first home or upgrading to a larger one.
Find more articles on the Columbia SC economy by reviewing our Columbia SC Real Estate News section to your right, as well as other articles under Columbia SC Economy, both just below Columbia SC Real Estate Categories. We also post articles on a regular basis on Facebook and Twitter.
Before you enter the Columbia SC home buying market, there are three important pieces of the puzzle you should understand. What do you know about closing costs? How about your credit score? What you know will help you make the best decisions once you find the home you're ready to buy.
Columbia SC Home Buying: What to Know
Tip #1.
Find out how much your closing costs will be. Often prospective buyers are shocked when they find out how much closing costs can be. Knowing in advance an estimate of your closing costs will help you plan better for how much of a down payment and other costs you will be expected to pay.
Most closing costs average between 2%-5% of the mortgage loan amount and cover items such as mortgage fees, appraisal charges, attorney’s fees and home inspections.
If the total amount exceeds what you have available or what you’re comfortable in paying, there are alternatives. One, as we’ll touch on in Columbia SC home buying Tip #2, is to negotiate with the home seller on payment of the closing costs. Another popular alternative is a low down payment loan program that requires as little as 3% down on approved home purchases. In addition, Fannie Mae recently rolled out a mending program designed to assist first-time home buyers. Qualifying purchasers are able to receive up to 3% of the home’s purchase price in closing cost assistance.
Tip #2.
Know which party is responsible for paying closing costs. There is also a fair degree of confusion as to who is usually responsible for paying certain closing costs at the settlement. As mentioned above, often home sellers will agree to pay some or all closing costs as an incentive to prospective purchasers.
Tip #3.
Know the value of your credit score. A popular television commercial depicts the feeling of empowerment a consumer has when they know and understand their credit score. A high credit score gives you a better chance at a lower interest rate when it comes time to take out a mortgage. In addition, your credit score may also affect other credit decisions regarding your home purchase such as the amount of utility deposit you may be required to pay, and even your home owners insurance premium.
There is currently some discussions in the home buying industry that some lenders are considering pulling away from FICO scores. However, it’s safe to assume that until it is known what will replace the FICO score, most lenders will base their credit decisions on the payment history of the debts you owe.
Following these important Columbia SC home buying tips will make your home search more enjoyable and more fruitful — since you’ll be more confident and informed about what is expected of you in the home buying process.
For more Columbia SC home buying tips see our Columbia SC Homebuying Tips articles to your right just below Columbia SC Real Estate Categories. Don't forget to find us on Facebook and Twitter, too.
Columbia SC homes recently built are more expansive and expensive. And when it comes to homes, American homeowners love their space and spaciousness. However, large sized homes come with larger price tags. As home become bigger they’re becoming less affordable for a bigger group of prospective buyers.
Columbia SC Homes: Big Houses, Big Prices
In 2014 the average size of a new home was 2,660 square feet. In 2015 the average size was 2,720. Nearly half the homes under construction in 2015 had four or more bedrooms. In addition, 25% of the new homes built have three-car garages or larger. With the increased size comes a heftier price. U.S. home prices have increased by 25% since the beginning of the housing market recovery in 2011.The average sales price of a new home in 2015 was $351,000 — compared to $251,000 just six years ago, in 2009.
If you’re renting in the Columbia SC housing market, now hear this: it isn’t easy to buy a house. It may be easier to stay put. That’s because home price gains are picking up, while rents are leveling off — despite the fact they’ve skyrocketed in recent years. Some economists predict that by the end of this year, rents could actually rise at a slower pace than income levels in many real estate markets throughout the U.S.
Zillow Weighs in on Columbia SC Housing
According to Zillow, the annual rent appreciation rate is forecasted to rise by 1.1% by December 2016. This would represent a decrease of 4.5% in the same appreciation rate for the year ending December 2015.
With home sales prices rising at what has been termed by some economists as “unhealthy and unsustainable,” rents aren’t expected to approach that rate of growth. The rising home prices are the result of fewer listings — a shrinking supply –– and increasing demand. In December 2015, the supply of homes on the market was the lowest in ten years. In addition, annual home sales price gains — meaning the average year-over-year increase in home value –– rose to 5.3%.
Columbia SC housing experts say the hot markets will continue to enjoy brisk activity during 2016. However, rents aren’t expected to rise as fast as they have in the recent past.
Despite the slowdown in rental appreciation, renters will continue to see gradual rent increases. They will just be less dramatic than the increases in the last several years. Strong growth in multifamily apartment dwellings in recent years has helped boost the supply of rental units in major metropolitan urban markets. The trade-off, however, is that developers have been slow to do the same thing in the smaller suburban markets. Renters in those markets seem to be struggling the most with short supply and higher rents. Rental property developers have shied away from settling for lower rents. They prefer to charge top dollar in order to recoup the high cost of construction — especially in the Columbia SC housing market where available land is expensive.
Get more updates on the Columbia SC housing market and news that affects the market by checking back here from time to time, and by checking out the other articles in our Columbia SC Real Estate News section of articles under Columbia SC Real Estate Categories to your right. We also post articles on Facebook and Twitter, so find us there, too.