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Homebuyers First-Time

Guide

Finding the Right Agent

The Purchase Process

From Contract to Closing

The Buyerâ&#x20AC;&#x2122;s Checklist

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CONTENTS 6 Finding the Right Agent

free-times.com | 1534 Main St. Columbia, SC 29201 | 803.765.0707 Published by Portico Publications, LTD.

EDITORIAL EDITOR: Dan Cook | editor@free-times.com | x133 MANAGING ED.: Katie Alice Walker | katiealicewalker@gmail.com CONTRIBUTING PHOTOGRAPHER: Jonathan Sharpe CONTRIBUTORS: Allison Caldwell, Mary Ellen Cheatham

Tips for First-Time Homebuyers

A Walk Through the Purchase Process

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Recent First-Time Buyers Share Their Experience

From Contract to Closing

The Buyer’s Checklist

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Finding the Right Agent

Tips for First-Time Homebuyers by allison caldwell

uying your first home can be a daunting task. Chances are you’re unlikely to stumble upon the perfect house for sale in the trendiest neighborhood at a price you can afford — and even if you did, it might no be the best investment. For first-time homebuyers especially, finding the right real estate agaent to help you through the process is essential to finding the right home that fits your needs, wants and budget.

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“New buyers often have so much emotion tied into finding that first home. They’re not always thinking about resale value down the road, but their agent should be.” — Burton W. Fowles Jr., The Knight Company There are tried and true methods of discovery: asking friends and family members for referrals, scouring print ads or websites for neighborhood experts and customer testimonials, and attending open houses to meet and greet potential agents in person. Finding someone you can trust for good advice will save you lots of frustration and money down the road. Part of finding someone you can trust is finding someone who will show you homes in the areas you are interested in. Not all agents are experts in all parts of town. Look at the “for sale“ signs in the neighborhoods you are interested in: Are there a few agents’ names that keep popping up? They might specialize in that area, so find out what their reputation is. Here are some tips from industry insiders to help you find the right agent.

Nick E. Kremydas CEO, South Carolina Realtors screaltors.org “As the largest professional trade association in South Carolina, we are committed to becoming the moving force in improving the quality of life in our state,“ says Nick Kremydas, CEO of South Carolina Realtors, which has more than 15,000 members statewide. “The two best resources on the web for consumers are realtor.com and houselogic.com. Realtor.com is the best place to search listings and find local realtors, and HouseLogic offers free information and tools from the National Association of Realtors to help consumers make smart and timely decisions.“ In deciding to work with an agent, Kremydas suggests asking certain questions:

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Craftsman-style homes in the Wellesley neighborhood in Lexington feature Earth-friendly amenities. File photos. Does the agent have an active real estate license in good standing? To find out, check with the South Carolina Real Estate Commission. Does the agent belong to a Multiple Listing Service (MLS) and/or a reliable online homebuyer’s search service? These cooperative information networks provide descriptions of most of the houses for sale in a particular region. What real estate designations does the agent hold? ABR (accredited buyer’s

representative), CRBsm (certified real estate broker manager), and CRS (certified residential specialist) are just a few of the value-added designations and certifications available to realtors.

Which party is the agent representing, the buyer or the seller? “This discussion should occur early on, at first contact with the consumer,“ Kremydas says. You’re bound to have lots of questions when you’re buying a home, and a good realtor will know more than just house prices. “Realtors are already familiar with current real estate values, taxes, utility costs, municipal services and

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facilities, and may be aware of local zoning changes that could affect your decision to buy,“ Kremydas says. “They can often suggest simple, imaginative changes that make a home more suitable and improve its utility and value. [Buying a home] is a major commitment, and realtors are sensitive to that.“

Burton W. Fowles Jr. The Knight Company, LLC theknightco.com A Columbia native and Midlandsarea agent since 1996, Burton Fowles says buyers have the advantage right now. He manages sales and daily operations at The Knight Company, a

locally owned agency specializing in in-town commercial and residential properties. “Buyers will continue to find great deals in the low and high-end range,“ Fowles says. “Prices are being reduced in all categories, so sellers in general aren’t going to fare as well. Until we see a significant increase in the number of buyers, the market will remain depressed.“ Fowles has worked with many first-time buyers over the years, and says his ultimate goal is helping them make a good investment. “New buyers often have so much emotion tied into finding that first home,“ Fowles says. “They’re not always thinking about resale

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they are just more fun to work with.“ Among many other resources, Riley shares five important tips with all first-time buyers:

Educate yourself and form a game plan. “I compare buying a house to the preparation any professional athlete puts into winning a championship,“ says Riley. “A successful athlete must train, educate and follow a game plan to succeed. Homebuyers should do the same.“ Find an agent. “Under most circumstances, an agent is free to the buyer and can help you avoid pitfalls,“ says Riley. He notes that the relationship between buyers and agents is built on trust and wise counsel. “If an agent ever does anything that makes you uncomfortable or isn’t in your best interest, find a new one.“

These upscale, two-story bungalows on Park Street are just north of downtown in historic Earlewood. Photo by Jonathan Sharpe.

“First-time buyers view it as an experience — almost a rite of passage. As an agent, they are just more fun to work with.” — Jeff Riley, Russell & Jeffcoat Real Estate, Inc. value down the road, but their agent should be. I certainly don’t profess to know how much they’ll make, but I can recommend neighborhoods and areas with a good history of investment for the future. Single adults or young couples may be years away from having kids, but schools really matter when it comes to resale. If you pay too much for a niche home in an area that’s difficult

to sell, you may not make much — if any — profit.“ Fowles says there are many lending programs available for firsttime buyers, and that a good real estate agent can guide them to the best solution. “We work with lenders that offer down-payment assistance, renovation loans and grants, and recommend lenders based on the buyer’s needs.“

Jeff Riley Russell & Jeffcoat Real Estate, Inc. jeffriley.net Jeff Riley is a top-producing licensed real estate broker with Russell & Jeffcoat, one of the largest residential real estate firms in the Southeast. He often hosts informative classes for first-time homebuyers, free to the public. “First-time homebuyers have a special place in my heart,“ Riley says. “They tend to have an excitement level that many repeat buyers have lost. Repeat buyers are often overwhelmed by life, simply don’t have time, and see buying a home as more of an annoying process. First-time buyers view it as an experience — almost a rite of passage. As an agent,

Work your mortgage backwards. Instead of asking a lender how much money you qualify for, Riley suggests sharing what you are comfortable spending on a monthly budget. “Ask your lender to work that number backwards to tell you how much to spend.“ Get a home inspection. “Buyers sometimes try to bypass this step to save a few bucks, but the cost is minimal compared to avoiding a bad decision you’ll regret later. Consider it an investment.“ Realize that this market is an unprecedented opportunity. “Rates are extremely low, there’s free money available, prices have come down and the housing selection is vast,“ says Riley. “All the cards are in favor of the buyer right now, but the window is not going to stay open forever.“ Let us know what you think: Email editor@free-times.com.

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The new homes in Rosewood Hills are close to the USC campus and Williams-Brice stadium. File photo.

A Walk Through the Purchase Process Recent First-Time Buyers Share Their Experience By Katie Alice Walker

s if Aubrey Phillips and Will Dillard aren’t busy enough — she’s a busy grad student working on a doctorate in linguistics, he’s a lawyer, and they’re planning a June wedding — they decided to throw buying their first home into the mix this winter. 12

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Thanks to the mortgage meltdown of the past few years, the process of purchasing a home is somewhat different today even than it was a couple of years ago — loan standards are tighter, for example, and buyers tend to be more wary about resale value. But the basics are still the same, and Phillips and Dillard did their research, contacted a trusted real estate agent to guide them through the purchase and now sit proudly in their three-bedroom, two-bathroom home near Satchel Ford Elementary. Before they could get there, however, they had to go through what any homeowner has been through: the anxiety of negotiations, financing and inspections. “I’d finished law school, and the time was right,” Dillard says. The couple, whose lease on their rental was coming to an end, knew the time to buy was coming, and they began thinking about exactly what they were looking for in their first home. “Mainly we wanted a home where we could stay for seven to 10 years,” says Dillard. “We don’t have children yet, but schools were important to us and we wanted at least three bedrooms and two bathrooms.” Through zillow.com, a real estate listing clearinghouse, Phillips received email alerts when new homes that met their search criteria, price range

and specs went on the market. A couple of months ago, after about a year of online browsing, the couple decided to contact a realtor. “We asked friends who were happy with their experiences with realtors,” Dillard says. The couple decided to contact Pam Elliott with Elliott Co. Realty in Columbia, and they began their search in earnest. “We looked at about 10 homes,” says Phillips, “mostly in Rosewood.” The Rosewood neighborhood, just south of Shandon and close to downtown, USC and Five Points, was appealing to the couple originally for its older homes in their price range. But after visiting other neighborhoods with their realtor, who showed them homes she thought they would like in their price range, they were led to a neighborhood across town. “The homes in Rosewood were smaller for the same amount of money, and we actually saw a home that we were interested in near Satchel Ford first,” Dillard says. “We came and looked and really loved it, and then we went back to see it again.” After the second visit to the house, which had only been on the market for a week, the couple decided to submit an offer to the seller. The couple’s realtor, who had shown them the home after learning its specs from the seller’s agent, walked them through the process

of submitting an official offer one evening. “And we didn’t get it,” Phillips says. “We were really bummed out,” says Dillard, but they continued to look around, and even seriously considered putting in an offer on another home. Then their realtor called and told them the good news. The contract another buyer had on the first home fell through, and the seller would accept Phillips and Dillard’s offer. The seller even agreed to replace the kitchen’s oven, and the couple agreed to move the closing date a little to suit the seller’s moving schedule. The three bedroom, twobathroom home with the spacious, camellia-filled backyard was theirs — almost. Next came the inspection. Dillard and Phillips were purchasing a home that was built in the 1950s. It wasn’t the oldest home in Columbia, but it wasn’t new construction, either. Behind all the charm that Columbia’s older homes offer often lie plumbing, roofing, HVAC or electrical problems. The couple’s inspector, Kip Craig (recommended to the couple by their agent), brought some issues to their attention. “There were some minor plumbing leaks and some issues with duct work in the crawl space,” says Dillard. Negotiations with sellers don’t end with the purchase price: After an inspection, buyers usually ask sellers to take care of outstanding problems, and haggling between agents ensues. The couple asked the seller to make and pay for the repairs; the seller agreed to make some of the requested repairs, but not all of them — and also asked to move the closing date again. Moving the closing date yet again didn’t work for the couple’s moving schedule, so they declined. Luckily for them, the seller agreed to stick to the previously agreed-upon schedule. Once the negotiating and repairs were done, Dillard and Phillips were ready for the closing date, when buyers and sellers head to a law office and sign reams of paperwork. South Carolina law requires an attorney to close a real estate transaction, though the attorney can often represent both the buyer and seller. It’s important to understand everything you’ll be signing in advance — your agent can help walk you through this — and find an attorney you feel comfortable with: You don’t want to show up at a law office and find out your mortgage payments will be higher than you’ve

Older homes like this one on Keenan Drive in Earlewood can be a very cost-effective choice for buyers looking to save money and live in town. Photo by Jonathan Sharpe.

“Know what you want going in, but be comfortable changing and balancing the things that are most important with those you can be flexible on.” budgeted for. Many buyers go through a similar process — doing some research, experiencing the high of finding a dream home, getting a bit frustrated during the process of negotiating with the seller — when searching for their first home. There’s also anxiety that can come from securing financing or larger-than-anticipated problems that might show up in the inspection process. Preparing yourself for a possible range of emotions is key to buying. What advice do Dillard and Phillips have? “We were surprised at how much the banks would work with you,” says Dillard, offering positive news about lending, even as banks have tightened standards in the past few years. “Talk to at least one or two banks to be pre-qualified and get an understanding of all the fees included in the loan closing,” says Dillard, who found his own financing rather than going through a mortgage broker. He also says he learned which

fees are uniform from lender to lender, but more importantly he learned which fees he could shop around and save on. Because the couple had financing pre-approved, they could look at homes and make an educated decision about what they could and couldn’t afford. “Find an agent you can trust,” says Dillard. “They know the process, tell you what to watch out for, but particularly they can guide you through the process. A realtor can give you comps in the neighborhood and help you understand what the property is worth and what you’re offering to pay. Our realtor also knew what values the neighborhood can hold. She knew a lot more than we did.” If you’ve ever looked at a real estate contract, you can understand the need for a professional’s expertise. A realtor can also offer suggestions for securing financing, and recommend businesses for repairs necessary before closing, inspectors and closing attorneys. Additionally, an agent will help buyers

negotiate price and possible repairs, usually through the seller’s agent, so that emotions don’t cloud the discussion. Dillard recommends keeping an open mind, too. Even after their diligent research, Dillard and Phillips purchased in a neighborhood other than their original first choice. “Know what you want going in, but be comfortable changing and balancing the things that are most important with those you can be flexible on,” Dillard says. Most first-time homebuyers are surprised somewhere along the way. This couple is no different, thought it was a happy surprise after they thought they’d lost the home they wanted when the seller originally accepted another buyer’s offer. “They came back to us, and even met our asking price,” says Dillard. “We were also surprised that we fell in love with the first house we visited,” says Phillips. “It had so much character and we found ourselves comparing every other house to it.” The couple’s hard work paid off. They moved in three week ago, and even though they say many boxes will stay packed until after their summer wedding, they’re enjoying the first few nights of homeownership as many new owners do: with Chinese takeout. Let us know what you think: Email editor@free-times.com.

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New homes for sale in Canal Place off Elmwood Dr. offer 1-car garages, energy-efficient features and a community pool. Photo by Jonathan Sharpe.

From Contract to Closing Signed a Contract? You’re Not Done Yet! By Mary Ellen Cheatham

ou’ve spent months thinking about your dream house, and maybe even years saving for a down payment. But the real crunch time begins when you place a home under contract. You will likely only have 30 days between signing the contract and completing the sale, and you will find that time crammed with things to do. 14

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It only takes one problem to derail the deal, but don’t be daunted. Find out below what to expect, and how to ensure that you’ll be enjoying your new home before you know it.

Before you sign: Just about everyone advises homebuyers to get pre-approved for a mortgage loan before you ever walk into a real estate agent’s office or set your heart on a home. In many cases, real estate agents require this first step. A pre-approval letter usually follows a lender’s examination of your financial records and credit, and will help you narrow your search by giving you an idea of which homes you can afford. It will also indicate to real estate brokers that you are financially able to buy a particular home, making them more likely to enter a contract. While the homebuyer must still go through the actual approval process for a mortgage, pre-approval will help prevent hitches that could prompt a broker to pull the contract. Hooray, a contract!: You’ve made an offer on a house, so now it’s time to sign the contract. An agreement will include information about the closing date, who will pay closing costs and other fees, on what terms you can back out if you have

to, a list of what will be left in the home — think refrigerator, stove and possibly washer and dryer — and so on. You most likely will have to pay earnest money, a kind of good faith deposit on that shows you’re serious about the home.

Get a property appraisal: That way you’ll have a close estimate of the home’s value. Provide the paper, pronto!: During the 30 days between the signing of the contract and the closing, mortgage lenders will want to know all kinds of things about you: your income, your assets and so on. This means that when your mortgage lender calls and asks you to provide a pay stub or a bank statement, get it to them yesterday. “The best way to describe the mortgage process right now is, ‘Hurry up and wait,’” says Kip Murphy, a mortgage loan associate at Bank of America in downtown Columbia. If you aren’t prompt with your lender, you could be forced to pull out of the contract while you’re waiting for final approval on your loan. With the U.S. housing market in shambles the past three years,

lenders are scrutinizing the finances of buyers much more closely. That extra detail creates longer delays. “Every question is a week,” says Murphy. For instance, if the lender asks you to provide a certain document, then it may take at least three or four days for the company to review it and get back with you. If the document is incomplete or raises more questions, expect another week to elapse before a decision is made on your loan. You can save time by having your records easily accessible so you can provide them immediately and save some of the time ticking away on your contract. Every day counts.

Keep your credit clean: “During the process, whatever you do, don’t be late on any bills and don’t buy anything that you have to use credit for,” says Murphy. That means no new cars or fancy furniture. It could cause your debt to income ratio to change, which could ruin your chances to get approved for the home loan. Even opening a credit card or department store account can ding your credit rating, whether you buy anything or not. Get homeowners insurance: Shop around for the best deal. Get the home inspected: A home inspection identifies problems with heating units and air conditioners, electrical wiring, plumbing, the condition of a roof and so on. “They turn every light on and flush every toilet,” says Kelley Hunt, branch manager of Homeowners Mortgage. You don’t want to scramble for thousands of dollars to buy a costly appliance, especially if it happens shortly after you’ve committed to a mortgage. It’s also wise to have a termite inspection. Knowing about any problems with the home upfront can also give you ammunition to negotiate for the seller to make any repairs before the sale is final, says James Swick, a real estate attorney in Columbia. Otherwise, “you can turn your dream house into a money pit nightmare,” he says. Your real estate agent likely will know the names of inspectors to call. You, meanwhile, should do a walkthrough of the house with the agent a couple of times before the closing. Consider a home warranty: A home warranty covers home repairs big and small. “I’ve never had anybody call back and say a warranty did not work,” says Jay Graham, a real estate agent with Graham Realty

and Builders. If something breaks, the warranty covers it. You typically only pay a small fee for a repairman’s service call. A seller often will offer the warranty and pay for the first year, but Graham advises buyers to invest a few hundred more dollars by paying for a second year. It’s worth it if something big breaks.

Take care of the legal stuff: You’ll need to hire a real estate attorney. The attorney can set you up with title insurance, which protects you from liability for problems with the title, such as a legal judgment against a previous owner. A title search examines the previous history of homeownership to see if there are any liens on the property or previously unknown heirs. Without the title insurance, you would be financially liable for those claims on your home. A survey is also a good idea, especially if it’s been several years since one was done, says Swick. A survey can identify whether there is a water or sewer line easement on the property. That becomes a problem if you want to add a room to the house. Local utility providers have the right to knock it down if they need to repair a broken water line or other damage to lines underground. A real estate attorney will also handle deed transfers, set up escrow accounts for property taxes and other fees, find out about any covenants and take care of other legal matters related to the purchase. Show me the money: Be prepared on closing day to pay fees and possibly closing costs, the amount of which will vary depending on how much the home costs. You should know ahead of time what those fees will be. Don’t bring a regular check, though. You must pay with a certified or cashier’s check. If you are a first-time homebuyer, you might qualify for assistance with your costs and even your down payment. Mortgage lenders may offer these programs through a grant from the federal government, says Kelley Hunt, a branch manager with Homeowners Mortgage. The company offers such a program. After all your work is done, you’re ready for closing day. Get to your attorney’s office early, and review your agreement. Make sure everybody who has to be there shows up. Then prepare to sign, sign, sign document after document closing the deal on your new home. Let us know what you think: Email editor@free-times.com.

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Kitchen renovations can often help with resale value — but be careful not to spend more than you can recoup. File photo.

The Buyer’s Checklist Invest Time and Energy Before Making Your Biggest Investment By Katie Alice Walker

hen it comes to buying a home, the best thing you can do is research your options and understand your needs. Educating yourself about different neighborhoods and resale values might save you from falling in love with a charming two-bedroom home in Earlewood when a home with more square footage and a garage off Trenholm Road might better suit your long-term needs. 16

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Read on for eight things to consider when searching for your first home.

Take Your Time Interest rates might be on the rise again for the first time in a few years, but they are still quite low by historical standards — and it still pays to take time to research what you need. As a homeowner, you’ll incur monthly expenses for things like utilities, homeowners insurance and landscaping that will quickly add up. Take these things into consideration as you’re determining what you can spend on a home monthly, and beware of free online mortgage calculators. They rarely include insurance and taxes, which can add a big chunk to your monthly payments. If you’re currently renting, take the time to test the waters and try out your budget. If you think you can spend up to $1,200 each month on your home, but you’re currently spending $700 per month in rent, try saving an additional $500 for several months to see what making a mortgage payment will be like. Not only will you test whether you’re ready to make the leap, but that $500 extra a month will quickly add up, and you can put those funds toward your down payment or closing costs when you dive into a mortgage.

Everyone Needs Approval Before you even step through the front door of a home on your hunt, find a lender you want to work with and get pre-approved. Knowing exactly how much you can spend on a home will save you heartache down the road and headaches once you have a contract on a home. Remember that your credit score is a huge determining factor when it comes to financing. Check out an online service like www.freecreditreport.com to get a free copy of your credit report up to three times a year from each of the nation’s major credit reporting agencies. If you need to clear up anything on your report, do so before you start your home search.

Condo or Room to Grow? Consider what you need in a home. You might want a charming bungalow, but if you’re single or just averse to gardening, owning a singlefamily home with a yard might not be the best fit. On the other hand, if children are in the not-so-distant future for you and your partner, you might want three or four bedrooms with a nice backyard, or a smaller home with room for an addition

down the road. Planning to stay in a home for at least three to five years is desirable, but remember that homes aren’t selling as quickly as they once were: You might want to push that timeline out a year or two, and be sure the home you choose can accommodate your needs.

Location, Location, Location For many buyers, location is the No. 1 factor when they’re searching for a new home. How close is the home to your office or other places you frequent? Are grocery stores and movie theaters nearby? If rising gas prices are important to you, consider the amount and flow of traffic near your home. Because Columbia now has several condos, townhomes and even homes in the Vista and on Main Street, an area’s walkability might also be a consideration in your search.

Welcome to the Neighborhood Once you’ve decided what you’d like your morning drive time to look like, it’s time to find the neighborhoods you’re most interested in. Columbia has an

abundance of great neighborhoods for first-time buyers. But look at neighborhoods with a discerning eye for what will suit you. For example, Melrose Heights, Old Shandon and Heathwood are close to one another and you can find similar homes in each, but the cultures of the neighborhoods are different. Drive around in neighborhoods on weekdays and weekends, during the day and evening. Do neighbors keep yards clean and tidy or are there old cars and trash around? Is it a safe place for walking, running and biking? Understanding a neighborhood’s crime rates will also help you decide if you want to purchase in a particular area. It also pays to have some idea of a neighborhood’s zoning requirements. For instance, if you wanted to run a small business from your home, could you?

School’s the Rule Whether you have children, want children, or couldn’t imagine ever having children, schools are a huge factor in determining a home’s value — particularly when it comes to single-family home neighborhoods. You might not be interested in an elementary school’s average test

In-fill development near Rosewood. File photo. scores, or a high school’s AP-course offerings, but when it’s time to sell down the road, many potential buyers will be.

New Construction vs. Character Closets, storage and modern kitchens or real hardwoods, charming details and established neighborhoods? It’s always a question. New homes offer floor plans for the way families live today and often include home offices, less formal dining spaces and more bedrooms and bathrooms. If do-ityourself projects aren’t your strong suit, and you’d prefer not to deal

with potentially increased home maintenance, a new construction home or a home that’s just a few years old might be your best bet. On the other hand, if you like the idea of classic architecture and weekend projects around the house, a home built in the 1940s may be right up your alley. Just be aware that the word “charm” in real estate listings is often a euphemism for “needs updating.”

The Keys to Resale Value Resale value is an important consideration whether the real estate market is moving rapidly or

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barely breathing; everyone wants to maximize their return on such a large investment. Many factors, including all of those listed above, affect what you’ll be able to ask for when it’s time to sell your home. Your real estate agent can be an especially valuable tool when it comes to determining potential resale value. If you plan to make renovations, update the landscaping or add on to the house, all of these factors will affect the value. But make sure the changes you want to make are worth it. If you’re eyeing a home that needs work, it’s important to know what value your particular neighborhood can hold. No one wants to spend thousands updating a home if you’ll never be able to recoup that investment when it’s time to sell. And you’re off to the races. Do your research, fine the perfect home, make an educated offer and move on in to life as a comfortable homeowner. Let us know what you think: Email editor@free-times.com.

Condos like this one at Adesso offer new construction, downtown convenience and skyline views. File photo.

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