There are several major Columbia SC home buying mistakes that could cost you a minor fortune if you slip up and commit these errors. Even so, there's plenty you can do to affect how much money you spend on a purchase.
A lot rides on your choice of real estate agent. A disturbing finding in a survey by Consumer Reports showed that 86 percent of agents said they witnessed other agents engaging in poor business practices which could cost consumers money. About a third said they saw agents steer buyers toward homes that would give them higher commissions. Others said some brokers exaggerate when marketing themselves. And 27 percent even knew of brokers who tried to persuade clients to sell a home for less than it was worth.
Avoiding Columbia SC Home Buying Errors
Rushing Into a Deal
One of the more costly Columbia SC home buying mistakes is agreeing to too high a price on a home. A related mistake is overestimating one's knowledge of the real estate market. It's not until you've been in the Columbia SC home buying market for a while that you know what homes are really worth. If you make an offer on the first house you fall in love with, you risk spending too much based on emotion, not practical sense. So take your time, go see lots of homes, and get a good idea of the local price scale. A tip: If you do enter into negotiations on a house and they come to a standstill, don't be afraid to walk away.
Biting Off More Than You Can Chew
Another mistake Columbia SC home buying customers make that puts them in a more financially untenable situation is under-estimating the costs of home ownership. You can't just calculate the monthly mortgage. You also have to factor in your closing costs and all of the additional fees you'll owe. Many of the fees are negotiable, such as the home inspector's fee, the cost to do a title search, and your attorney's fee. And find out what the current homeowner pays for utilities, taxes, and other monthly costs, so you can be sure you can really afford that home. Also get estimates for repairs you want or need to make to the home before you move in.
Not Upgrading Your Credit Score
To get the most favorable rate on a loan, you have to have a strong credit profile, and that means a credit score of at least 740. Recently, if your score was 740 and you applied for a $300,000, 30-year fixed mortgage, you could qualify for a 3.75 percent interest rate, with monthly payments of around $1,389. If your score was below 680, the best rate you might expect would be around 4.25 percent, with a monthly payment of $1,476 for the same loan; over the life of the loan, you'd pay $31,130 more. Don't wait until the last minute to scrutinize your credit reports and make any necessary changes to improve your profile. If you find errors, be sure to dispute them. Get your credit score as high as possible before starting out on your Columbia SC home buying expedition.
Not Shopping Your Mortgage
Just as important as getting your credit score as high as possible is shopping for that mortgage. Sticking with your regular bank could be costly. Approach several lenders, including banks and credit unions. You can search for national deals online. We don't recommend that you hire a mortgage broker to do that because he may be more focused on selling you a mortgage than getting you the best deal. And get pre-approved for a loan before you shop; sellers take preapproved buyers more seriously.
Skipping a Home Inspection
One of the biggest Columbia SC home buying mistakes comes from people who do not get a home inspection and find out later there were big problems with the house. You want to be present during the inspection to learn about any costly repairs that might be needed and to get basic info on the home, such as where the electrical panel is and where you shut off the water. A home inspector can also point out repairs that will need to be done in the next few years based on the average life expectancy of things in your home.
We have more helpful tips on Columbia SC home buying in our section on Columbia SC Home Buying Tips to your right under Columbia SC Real Estate Categories.
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When looking at Columbia SC homes for sale, there are several key things which should never be overlooked. This is a major investment and your search should be thorough so you don’t experience buyer’s remorse and won’t be wishing you had bought something different two months after moving in.
Must Things to Look For When Shopping Columbia SC Homes For Sale
Location
Without question, location is the most important aspect to consider when looking for Columbia SC homes for sale. Imperfections in the house itself can be fixed. Dream components, you can live without or add later. You can’t, however, pick up the house and move it to a new location. If you accidentally buy in a bad neighborhood, you’re going to be perusing the new Columbia SC homes for sale listings once again before the year is out. This time, however, you’ll have another worry: selling a house in a bad area. Make sure you love where your house is located before you even consider buying it.
Curb Appeal
When owners and real estate agents attempt to put a house on the market, a lot of emphasis is placed on curb appeal. But this isn’t just for sellers. As a prospective buyer, you should consider it as well and on more than just an instinctive, impulse level. Look at the new Columbia SC homes for sale and consider which ones best reflect your lifestyle. If you don’t have the money to afford a landscaping crew and don’t care for yardwork yourself, why is that huge backyard with garden and pond so appealing? Consider the materials used to build the house. Wood, brick, and other materials all have their advantages and drawbacks. Know them before you make your decision.
Size
If you just won the lottery or happen to have the kind of income that allows you to choose whichever new Columbia SC homes for sale you care to buy, congratulations on your fortune! For most people, however, buying a house means making some tradeoffs. You may want that mansion by the lake, but do you really need 6 bedrooms for a family of three? On the other hand, you don’t want to buy a tiny house for a large family. Think carefully about size and don’t make a decision based on emotion. Remember, this is a huge investment, so make sure you follow these three guidelines when looking at any Columbia SC homes for sale.
We have other home buying tips right here at our site. Just click on the Columbia SC Home Buying Tips link under Columbia SC Real Estate Categories to your right.
Buying a Columbia SC house is a smart investment these days, assuming you can get a loan. Granted, everyone has an opinion about the housing market cycle. Have we hit bottom? Are we already past the bottom and on the way up? Opinions about the housing cycle are like butts, everyone has one.
Trying to figure out when the best time might be for buying a Columbia SC house can be tricky, considering how long housing cycles are. You can always buy low and watch prices go lower. But by many measures, home prices are still cheap.
The median single-family home price — half higher, half lower — seem to have hit its bottom in January, dropping to $154,600, the lowest since October 2001, according to the National Association of Realtors. That’s down from a high of $230,900 in July 2006. Existing-home prices rose in June to a median $190,100, up 8% from June 2011. Those are still 2003 levels.
The supply for buying a Columbia SC house is shrinking. This supply shortage is due to people not wanting to sell their homes while prices are down. When excess supply dries up, people start building more new houses, which has the effect of reducing the unemployment rate and increasing the economy in general.
Mortgage Rates for Buying a Columbia SC House
If you’re buying a Columbia SC house now, mortgage rates are still crazy low, compared to historical rates for a home loan. Assuming you financed 80% of a median single-family home, or $152,080, your mortgage payment would be about $691, excluding taxes, insurance, HOA fees, etc. About $5,589 of your first year’s payments would be tax-deductible mortgage interest.
So what could possibly go wrong if you’re buying a Columbia SC house? First, you may not be able get a loan. Bankers are insisting on checking things that seemed far too troublesome during the housing bubble, like whether you have a decent credit rating, a down payment, or a job.
Another Problem When Buying a Columbia SC House
The other problem is that houses are leveraged investments — that is, you borrow money to buy them. Let’s consider the example above, where someone buys a $190,100 house and finances $152,080. Your investment is $38,020. Let’s say that the worst happens: home prices fall, and you have to sell the house for $175,000.
Unfortunately, the bank won’t split the loss with you. You’ll get back $22,920 from the sale, and wave goodbye to $15,100 of your down payment. That’s a 40% loss, even though your house has fallen 8% in value.
There are other risks when buying a Columbia SC house, ranging from termites to water leaks. But if you’re planning to live in your home for a long time, you have the money, and you can get financing, there’s probably never been a better time to buy.
Columbia SC home buying has never been more affordable than it is right now. However, there are factors looming that could change the face of home ownership in this country forever.
The Joint Center for Housing Studies of Harvard University recently released their report, “The State of the Nation’s Housing 2012.” In that report, they forecast that over the next few years, home ownership rates among younger households will remain under pressure. Members of the large echo-boom generation are just beginning to enter the housing market, but primarily as renters. In addition, greater numbers of middle-aged households are delaying home ownership or returning to rental housing.
As millions of distressed homeowners lose their homes to foreclosure, they will require years to repair their tarnished credit records before buying again. As a result, increases in the number of renters will continue to outpace any growth in homeowners. If not for older households, who have high home ownership rates and account for an increasing share of the population, the decline in the national home ownership rate would be much greater.
Columbia SC Home Buying – Rarely More Affordable Than Now
A strong, sustained economic expansion could, however, produce a quick turnaround—particularly in markets that did not experience the worst of the foreclosure crisis. Columbia SC home buying has rarely been more affordable, and a more robust economy would provide the income and confidence that would enable many potential buyers to make the long-term commitment of owning. Indeed, home ownership continues to have strong appeal. In the fourth quarter of 2011, the Fannie Mae survey found that seven out of ten renters—as well as more than eight out of ten homeowners who are underwater on their mortgages—think that owning makes more financial sense than renting.
According to the Harvard University report, young first-time buyers, including an increasing share of minority households, will drive future growth in home ownership. The question going forward is therefore whether the troubled mortgage market will provide access to affordable mortgage credit for borrowers with limited savings and anything but the highest credit ratings.
Columbia SC home buying can be tricky. Contact us today to learn more about how we can help you all throughout your Columbia SC home buying experience.