Most people buying Columbia SC real estate are somewhat delusional in thinking they know something about what they are doing. The fact is, unless you've bought and sold a lot of properties, you probably fall into the category of knowing very little.
3 Things You Should Know When Buying Columbia SC Real Estate, But Don't
1. All Homes Have Problems – All houses have issues, some just have more than others. The shock usually comes when prospective buyers get their home inspection report back. Inspectors are professional pessimists, which is why we love them. But many issues only require simple and/or inexpensive fixes.
Most inspection reports will be 40 to 50 pages long, and most inspectors will take close-up, HD photos of problems. So while the actual listing shows gorgeous pictures of granite countertops, the inspection report will show awful pictures of a cracked driveway. By the end of the report you may be thinking the house is a total and complete lemon.
2. When Buying Columbia SC Real Estate, You're Making TWO Purchases – When you buy a home, you actually are making two purchases. You are buying the home, and you are buying the money to buy the home.
For every 1% rise in interest rates, home prices would have to fall by 10% in order for you to maintain the same monthly mortgage payment. And at the end of the day, that's what matters, the monthly payment. So take advantage of low rates; they add much more buying power to your purchase than low prices.
3. Always Be Thinking Resale – This piece of the Columbia SC real estate puzzle is something that all people buying assets should keep in mind: At some point you're going to sell it again and will want to maximize what you eventually get.
When you're buying a home, you're probably not thinking about the day you will have to sell it, but you will be thanking yourself one day if you remember those three little things you've always heard about Columbia SC real estate… location, location, location!
Keep these things in mind when buying Columbia SC real estate and don't make the same mistakes most of your friends and relatives will make.
For more tips and articles concerning buying Columbia SC real estate, click the Columbia SC Home Buying Tips link to your right under our Columbia SC Real Estate Categories.
Buying Columbia SC real estate is still considered to be one of the biggest goals for most Columbia SC residents who don't already own their own home. Saving for the down payment is a big hurdle for many. On top of the down payment, you'll need funds for closing costs as well. But just how much should you save if you're buying Columbia SC real estate?
Short Term Plan for Buying Columbia SC Real Estate
Lenders look at your pretax income when determining how to qualify you for a mortgage. When thinking about buying Columbia SC real estate, you should plan on doing the same, using a percentage of your gross income for determining how much you need to save.
Being able to sock away 20 percent of your income could accelerate your home buying plan to the next 12 to 16 months. For example, if you're earning $96,000 per year, that's $19,200 saved after one year. $28,800 saved after a year and six months, which can be plenty of funds to make buying Columbia SC real estate a reality.
Long Term Plan for Buying Columbia SC Real Estate
Putting away at least 10 percent of your pretax income is a great place to start planning for buying Columbia SC real estate. Using the same example of $96,000 of income, that's $9,600 per year allocated for home savings. It would only take an extra year to come up with the same type of cash in the short-term plan's one-year goal.
Saving a percentage of your income is no easy task, especially when you have those months where the money runs out before the month does. It requires diligence, attention to detail and financial discipline to consistently put that money in the bank despite other debts and household expenses.
Remember as you are diligently saving a portion of your income for buying Columbia SC real estate: A lower down payment and lower total cash to close means a higher monthly mortgage payment. Conversely, a larger down payment gives you a lower mortgage payment. Also, the percentage of mortgage insurance lowers if a buyer uses more equity.
Determine Costs for Buying Columbia SC Real Estate
Let's look at a home priced at $500,000. Given certain criteria, $27,500 is what it would take to close the deal. Here's the math:
• $500,000 purchase price.
• $10,000 closing costs (at 2-2.25 percent of the purchase price).
• $17,500 (a 3.5 percent FHA down payment).
• Giving you a total cash payment of $27,500 needed.
If you have been diligently saving for a house, and still have not been able to purchase a property, talk to a lender about getting pre-approved. Perhaps it's time to re-evaluate how much percentage of your income is going to saving versus what homes are selling for here in the Columbia SC area.
To learn more and stay current on buying Columbia SC real estate, as well as tips and information on buying a Columbia SC home in general, check out our other articles by clicking on the Columbia SC Home Buying Tips link to your right under Columbia SC Real Estate Categories.
2013 could be your lucky year for buying Columbia SC real estate. People who are either buying their first home or are moving up to a more expensive home are likely buying at a historically opportune moment.
Two Markets Governing Buying Columbia SC Real Estate
1) The housing market and 2) The bond market.
The housing market’s effect is obvious. If homes have increased significantly prior to purchasing a home, it’s likely that future housing price gains won’t be as great. But, if homes have dropped significantly in price, it stands to reason they will increase in the coming years.
The bond market impacts interest rates. Houses really have two price tags. One is the cost of the home itself and the other the cost of borrowing to buy that house. Obviously, the higher the interest rate, the more interest one will have to pay over the life of the loan.
It just so happens that right now, both of these price tags are marked as “Reduced!”
Columbia SC real estate prices plummeted from 2006 until 2010. They haven’t gone up much since 2010 until recently when home prices have begun to move higher.
Mortgage rates dropped like a rock after the financial crisis of 2007 and 2008 and remain near all-time lows.
So, when historically low home prices meet historically low mortgage rates – what do you get? You get a very affordable home, and a great time for buying Columbia SC real estate.
People should make the decision to purchase a home based on how they want to live their lives rather than as a purely investment-driven decision. But when the economics match up with one’s life – it’s a great opportunity!
If you need help deciding whether ’13 could be your lucky year for buying Columbia SC real estate, contact us for a free, no-obligation consultation on buying Columbia SC real estate, and whether the time is right for you and your family.
We have a lot of Homebuying Tips listed for you under the Columbia SC Real Estate Categories to your right.
Buying Columbia SC real estate in 2013 is likely to be very tricky for home buyers. Here’s why:
The number of homes for sale fell to a 13-year low nationwide in January, leaving would-be buyers chasing a shrinking supply of homes just before the spring selling season.
The Columbia SC real estate market is clearly rebounding, but not because prices are crazy. It’s simply the old rule of “supply and demand” kicking into high gear. Buyers outnumber the available homes for sale in the Columbia SC real estate market.
The same problem is facing buyers on a national level as well. There was an average of 4.8 months of supply of existing homes for sale in the fourth quarter, according to the National Association of Realtors (that is, it would take 4.8 months to sell off the inventory at the current pace). Six months’ supply is closer to normal. In 2010, the supply of existing homes was as high as 10 months.
Prices are starting to rise as a result of the strong demand relative to low supplies in the Columbia SC real estate market, with prices still about 30% below their peak. Reasons for the slim pickings aren’t good news. Lenders are taking their time putting bank-owned properties on the market, in part to keep prices up.
Sellers are waiting until prices rise before listing their homes for sale. Nationwide, about 11.9 million homeowners are still underwater, according to estimates from Moody’s Analytics. When you’re underwater – that is, owning more on your mortgage than the home is worth – you’re much less likely to list your home for sale.
Strategies for Shopping Columbia SC Real Estate in 2013:
Stay Calm in a frenzied market. Don’t get caught up in the hype and think you have to have a certain house because you may not find another one. Be conservative, and be willing to wait.
Make your best offer. If you find yourself in a bidding war, you need to make your offer stand out. Be prepared to make the best offer. The danger is in overpaying, but in a rising market, when you look back 5 years from now, you’re not going to be as concerned that you may have paid $5,000 over asking price to get the house you want now.
Pre-Approval is a must. In the competitive Columbia SC real estate market that we’re in, buyers need to have a pre-approval letter in hand before even starting to look for homes. Be prepared for a stringent underwriting process. Lenders want to see a consistent income stream. And a gift or funds transfer must be well documented. One benefit to a pre-approval is that it sets a price limit on your home shopping. There’s no sense falling in love with a place you can’t afford to buy because you can’t get approved for the loan.
Make a large down payment. When making an offer on any Columbia SC real estate, bringing more than 20% down to the negotiating table will make your offer more competitive. Sellers know the more you bring to the table, the less likely there will be a bank problem.
Find a good agent. An experienced real-estate agent may alert you to homes before they come on the market. Plus, if your agent is respected, that can help you stand out with the seller’s agent.
Buying Columbia SC real estate this year can be a challenge. Stick with these tips when you’re starting out, and you’ll be ahead of the game you’re competing in. For more information on buying Columbia SC real estate, check out our other articles in the Columbia SC Home Buying Tips section under Columbia SC Real Estate Categories to your right.