“Charleston is so HOT right now!” Hot meaning so many people are wanting to move to the area and purchase homes. A lot of this attention is due to TV shows such as Southern Charm, Mr. Mercedes, Vice Principals, Army Wives, The Inspectors and Reckless. It also couldn’t hurt that Charleston has won Best City in the World and Best City in the U.S. by Conde Nast for several years.
Yes, I know you’ve heard the statistics! There are 42 people moving to the Charleston Tri-County Area every single day. 42, 43, 44….whatever, we get it. People want to move here for the same reasons that we live here to begin with, the beautiful weather and proximity to the ocean, just to name a few. Unfortunately, it means a lot of competition for real estate listings. Builder Magazine says here, “Charleston has 1.8% of inventory available, compared to 0.8% in New York.” This means that there are more buyers than sellers. So, how can you buy that house you’ve been looking at online for the past 5 nights? The answer is by following these 7 tips. Here they are:
1. Get Preapproved by a competent loan officer/company
This is the FIRST STEP in real estate. Most people go about this in the wrong order. First, they go online and look at houses. They find a house they want to see and immediately call their real estate agent. After they see the house and still love it, they want to make an offer for which a pre-approval letter is normally needed. So, in order to set yourself up for success, you need to first meet with a lender, who can close you in a decent amount of time, say 30 days for example. You should be looking at your front end ratio for what you can afford in a house payment and not what you can be approved for in a house. You should tell your lender what monthly mortgage payment you would be comfortable with and that is not just principal and interest. You should also factor in for mortgage insurance, property taxes, homeowner’s insurance, flood insurance and HOA dues. Your house payment should be about 30% of your pre-tax monthly income.
2. Be the first person to see the house
The first person in the door and that makes an offer is almost always the most serious buyer. These people have been waiting for a house like this to come available. In real estate, the early bird does get the worm. The key to being the first in the door is to have your agent set you up on auto-email alerts. Through this service, you can get an email as soon as the listing agent hits “SUBMIT” on MLS and goes live.
3. Make sure your agent speaks with the listing agent
If you are interested in a house, your agent should be in contact with the listing agent as soon as possible. In case there is other interest or offers, you have to ask and express your interest before you miss out. You also must ask the listing agent about how you can make your offer more attractive. Ask them what are the seller’s priorities in regards to closing date, personal effects, and if they need to rent back. Communication is the name of the game.
4. Look at the comparable sales (comps) for the neighborhood/area
This is important so that you don’t offer too much where a low appraisal could be a point of contention later. And, as Dave Ramsey says, you don’t want to buy the most expensive house on the street. It is also helpful to drive around the entire neighborhood to see if there are any thing about it that you may dislike. I had clients who were all set to write an offer after a second showing and second drive from the Upstate when they found out that they didn’t like an area towards the back of their subdivision. Also, do your research on the proximity to local stores, coffee shops, etc.
5. Write a letter to the seller
The whole home buying process can be so mundane at times and be all about numbers. The selling process is as emotional as is the buying process. Sellers most of the time care about who is buying their home and will be living where they once lived. Some sellers live in homes where they brought home their first child or where they moved just after they were married. I understand that very well. Tell the sellers what you love about your home and why you fell in love with what they have done to make it so warm and fuzzy. It is important and could make the difference. I had one couple write a personal letter with a photo attached and they were able to get their offer accepted even while being $13,000 less than the highest offer.
6. Include an escalation clause
With so much competition in this real estate market, you need a real estate agent that knows what they are doing. I have been on the winning and losing side of an escalation clause. When you have multiple offers competing on a listing, you have to find a way to level the playing field. You have no idea what another agent has offered thus the importance of an escalation clause to help you from going too high. I can help you with this one. For a great article on an escalation clause, go here.
7. Hire a local real estate agent who can negotiate
Buying a house is a huge decision. You need an agent who knows the area and can tell you what you may not know about the neighborhood and city that could affect future resale or your daily life in the area. Negotiation is a huge part of real estate contract negotiations and it doesn’t stop once you’re under contract. You need an agent who can help you negotiate important repairs and any appraisal issues are just two of them.
I was blessed to be able to be born in Charleston, SC and have lived in the area for 34 of my 39 years on Earth. For more information about the area from the Visitor’s Bureau click here. Please contact me here if I can help you in any way. – Del Shaffer, Carolina One Real Estate, (843) 408-6821