One of my pet peeves while viewing properties on the MLS is to find listings with NO picture or pictures that frankly are SO POOR in quality, that even a teenager with a cell phone would take a better shot.
So I am going to establish the "WORST PICTURE OF THE MONTH AWARD" - I invite your contributions! (please make sure no names or addresses are included in the file name or description).
Here is my pick for this month's award candidates:
It's only 116 x 76 pixels in size *you need a magnifyng glass to see it*, AND it's blurry!
I'm sure you will find other contenders in your MLS...
This is the last part of our brief guide for first-time home buyers in South Carolina. Once you have closed on the purchase of your home, you will still need to take care of some very important details (in addition to your move):
1.Change all the utilities in your name. Usually sellers stop their accounts as of the closing date, sometimes they give you 1-2 days grace. The last thing you want is to get to your newly purchased home and find the power is off, and the temperature outside is 98F...
2.Re-key all exterior doors. Although the sellers may have seemed very nice, you never know who else has keys for the home. Don't forget to re-program the garage door openers!
3.If there was a transferable termite bond, make sure you transfer it in your name so you can actually file a claim, if necessary.
4.Once a property changes hands, two things change with respect to property taxes: The first, is that the home "assessed value" will change to reflect the purchase price. And the second, it that the home will be taxed at a 6% assessment ratio. This could bring a nasty surprise in the shape of a letter from your bank, announcing you that your monthly payment needs to be substantially higher to be able to cover the anticipated costs of taxes and insurance in their escrow account. If you intend to liv e in this home as your primary residence, South Carolina residents are entitled to a PRIMARY RESIDENCE EXEMPTION that decreases the assessment ratio from 6% to 4% (which will bring the tax more in line to what your lender initially estimated in their Good Faith Estimate, since the lender probably assumed that this was going to be your primary residence and estimated the property tax at the 4% assessment ratio)...to claim the primary residence exemption, you will most probably need to change your home address on your driver's license, and bring the new license, copy of your closing documents (the HUD-1 statement and/or deed, if you already received it back from the attorney) and a utility bill in your name to the new address to request the change at the County Tax Assessor's Office.
5.Remember to change your address at the post office (better yet, pay for their 6-month forwarding service) and notify all your creditors (credit cards, stores, etc.), friends and family. The last thing you want is to damage your credit because you did not get the bills.
6.Get involved in the HOA as a property owner. This is a right you did not have when you were renting. Now you can actively participate in the democratic process of your homeowners' association.
7.Send a copy of all closing documents and expense receipts associated with the purchase to your accountant. Some closing costs and expenses may be tax-deductible.
8.If you are a first time home buyer and purchased your home in late 2008 or in 2009, you may be eligible for the Tax Credit offered by the Federal Government. You don't have to wait to file taxes to claim this credit. All you need to do is to ask your accountant to submit the required form and, if you are eligible, you will get a check in the mail from Uncle Sam!
WE HOPE THAT YOU HAVE ENJOYED THIS SERIES. If you are thinking about buying a home ANYWHERE IN NORTH AMERICA, we can gladly help you find a local, experienced REALTOR who can assist you in your quest. If you are planning to move to the Charleston area, or live here already, WE WOULD WELCOME THE OPPORTUNITY TO EARN YOUR BUSINESS. Contact us today to start the process - we will help you every step of the way - from A to Z!
You have finished performing your Buyer's Due Diligence and everything's lined up for a closing on a specific date and time (usually at the attorney's office). What happens at this "closing"?
A "real estate closing" is the name given to a completion of the real estate transaction, including legal (title) and financial (loans & mortgages) aspects. It is an event that normally takes about an hour, in which normally all the parties are present (the sellers and their listing agent, the buyers and their buyer's agent, the closing attorney, and in some instances the loan originator). The parties each sit facing each other, and the attorney will explain the process and start sending papers their way to have them signed.
Be warned! By the time you finish, your signature hand will be tired! Buyers may sign 50-100 times (depending on the complexity of the financing and the lender). By contract, the Sellers only need to sign very few documents - so the Buyers have the most work...
The attorney will first start by reviewing the HUD-1 Statement to make sure that all the financials are correct. These include: Purchase price, earnest money, down payment, seller concessions, lender origination costs, agents' commissions, homeowners/wind & hail/flood/title insurance premiums, attorney's fees, taxes (i.e. deed stamps), prepaid items to create the escrow account, and any service providers' bills related to the real estate transaction (for example, the CL-100 - termite letter - is normally paid out of closing).
When everyone is in agreement, the attorney will normally ask everyone to sign several copies, and will also ask the Buyers for the balance owing for their downpayment (note that the Buyers' agent or closing attorney should have told the Buyers in advance how much they needed to bring to closing, since these funds need to be either wired in advance into the attorney's escrow account, of paid by Cashier's Check at the closing).
Next, Buyers and Sellers will normally sign all kinds of disclaimers and certifications (to make sure their identities, Social Security Numbers and information is right). The Buyers will also be asked to provide picture IDs (normally driver's licenses or passports), and the attorney's paralegal will make copies of those documents to comply with the Patriot Act. The Buyers will also sign a copy of the CL100 Termite Letter.
Following this, the attorney will usually ask the Sellers to sign the transfer of the deed and their mortgage discharge documents.
Now the fun part starts for the Buyers: Signing the loan(s) notes and their corresponding mortgage documents. The amount of paperwork varies depending on the lender, but this can take some time and effort, since the lenders will want the Buyers to sign and initial every document and affidavit in their closing package. Some lenders are very bureaucratic, others are not.
After all the paperwork has been signed, the attorney normally checks to verify if the funds from the new mortgage loans have arrived in his escrow account. If they have (the transaction is "funded"), the attorney will proceeed to disburse checks to all the parties, and the Sellers will hand over the keys of the home (and the garage door openers, pool keys, etc.) to the Buyers.
If the funds did not arrive on time, the parties can agree to do a "Dry Closing", in which case it is a good idea that the attorney holds all the paperwork and the house keys until the funds arrive (it may take just a few hours, or up to a couple of days!)
Now it's done! The home is officially the Buyers' (although the deed may take a few weeks to be registered in their name).
You found a home, negotiated a favorable contract ("ratified" = signed & delivered). You are supposed to close in 30 days. What now?
This period from contract to closing (also known as "escrow period" in some states) is critical for the buyers to do their due diligence. This means investigating everything they want about the home including the bricks and mortar, the title, the neighborhood, etc. to their satisfaction. It is also the time to formally apply for the loan (you may have shopped around with different lenders before you got pre-approved by one of them. You do not necessarily have to use the same lender, but cannot hesitate to submit a formal application because most contracts include a deadline to apply for the loan, and a deadline to get formal approval.
Due diligence is not rocket science, but there are a lot of small details that need to be taken care of in a certain order. The due diligence is a TEAM EFFORT between you, your REALTOR (who can play a pivotal role), the attorney and other service providers. Here is a partial list of steps that need to be taken care of during this period:
1. Inspections - buyers need to make sure that the home has no major, unforeseen problems with its structure, plumbing, electrical or mechanical systems, and that it is safe for human habitation. These inspections may include:
Home Inspection - looks at structure, exterior siding, roof, windows, foundation, plumbing, air conditionin, electrical and basic appliances.
Termite, Pest and Moisture - Makes sure that the home is not infested/damaged by termites, fungi, woodrot or vermin
Structural - necessary only if there is an issue that the home inspector recommends to be looked at in more detail
Survey - determines the boundaries of the lot, and the location of the buildings on the lot. In the Lowcountry it is common practice to order an Elevation Certificate, stating the elevation of the main floor above sea level for insurance purposes
Pool - if desired by buyers
Radon and other Potential Contaminants - while Radon and other contaminants are not common in the Charleston area, buyers who are coming from areas (where these issues may be more common) feel better if they order these inspections for their peace of mind.
2. Legal Due Diligence
You will need to hire a closing attorney (SC is an attorney state) to do the closing. I recommend you choose one who is specialized in real estate (other attorneys can do it but they may not be up to speed with legislation or the closing process and may delay or even derail a transaction). This is YOUR closing attorney (the buyers normally choose the closing attorney) and he/she is supposed to represent your interests in the transaction However, he/she will normally also represent the other parties parties (sellers, lenders). The closing attorney's functions include:
Perform a title search to discover liens and potential problems with title marketability.
Get a title insurance binder (most attorneys are also agents of title insurance companies and will sell you the title insurance policy - you don't have to buy it from them, but most people do)
Order a survey (only if you request it)
Contact current lienholders to request payoffs of existing liens as of the proposed closing date
Prepare all closing documentation related to title, deed and new loan notes/mortgages
Prepare a preliminary closing statement (HUD-1) for your review
3. Loan Processing
The contract normally stipulates a deadline for buyers to sumbit a formal application and to receive full loan approval. You will need to submit a formal application to the lender you choose to go with, and normally pre-pay $300-400 for the appraisal to be ordered. These days appraisals take more time due to recent new federal regulations. Please note that as of July 1, 2009, if you have even a slight variation on your estimates for nominal interest rate, insurance and closing costs that affect your APR on the loan, you will need an additional 3-day "disclosure" period before you can close.
4. Insurance Policies
During this period you will have to determine which insurance policies you will need/want and shop around to choose a carrier/agent. The types of insurance policies that you may need are:
Homeowner's (Hazard) Insurance
Wind & Hail Insurance
Flood + Excess Flood Insurance
Contents (Renters) Insurance to Supplement Insurance carried by your regime (in the case of a condominium)
Once you choose the agent/carrier(s), you will need your agent to send the "binders" and invoices to your closing attorney, to be paid out of closing. Check that your insurance is being paid for by the attorney by reviewing your HUD-1 statement. I have heard of instances where the binder was sent to the closing attorney but the invoice was not, so the premium did not get paid out of closing and the buyer was uninsured unknowingly!
5. Repairs
Unless the property is being offered "as-is", normally a seller has to provide a home that is broom-clean, free of leaks, structurally sound, and with safe and healthy plumbing and electrical systems.
After all the inspections are done, you and your REALTOR will sit down and produce a "Repair Adendum" listing the items that you want corrected or fixed before the closing (your "wish list"). Normally this lists exceeds the basic expectations and will lead to a second round of negotiations between sellers and buyers. Sellers sometimes offer the buyer compensation en lieu of actually doing the repairs. Once the repairs (or compensation) are agreed to, the seller will fix the agreed items prior to the closing...
OK - so you've hired a REALTOR, discussed your needs and buying criteria and got preapproved by a lender. Now it's time to go see homes! Although it is a relatively small city, the Charleston Metro Area is very large, with hundreds of neighborhoods, areas and subdivisions each with a different style, construction, lot size and price point.
Step 4 - The Home Search
The home search is a collaborative effort between you and your REALTOR. If you are comfortable "sharing the news", make sure that you mention to everyone in your sphere of influence that you are looking to buy a home. It is impossible to know where your best option is going to come from - there are many sources of information at your disposal - including:
The Internet (Your REALTOR's website, the MLS, REALTOR.com, Craigslist, Facebook, etc.)
Your REALTOR
Driving Around Neighborhoods (Yard Signs on Listings, For Sale By Owner)
Friends/Colleagues/Family hearsay
Newspaper/Real Estate Magazines
In a "Buyer's Market" such as the one we experienced in 2008, there are so many "suitable choices" out there that your home search may become overwhelming UNLESS you have a system in place. I recommend that my clients use the "helicopter approach", starting from up above in the sky to the landing zone (from general to specific).
You should first try to narrow down your search (using your "Needs" and "Wants" criteria) to 2-3 general areas (for example "within JB Edwards Elementary or Mount Pleasant Academy school catchment areas") , then down to 2-4 neighborhoods within those areas (i.e. Old Village, I'On, Molasses Creek Plantation) and then down to specific sub-sections and maybe even streets you prefer. If you are able to do this, the process to choosing a specific home will be fairly simple.
Step 5 - Negotiating a Contract
You found a home you love! Now your REALTOR will help you structure an offer, looking at the listing history, the sales comparables in the area, and general market conditions. You will have to write a check for the EARNEST MONEY (normally 1% of the purchase price), and determine the TERMS of the contract (including but not limited to purchase price, closing date, conditions, contingencies and concessions). Your REALTOR will send the offer to the LISTING AGENT (who represents the Seller) and you will have to wait for a reply from the Seller. The offer can result in:
ACCEPTANCE: The Sellers accept your terms and conditions - once the contract is signed and delivered back to you, it becomes RATIFIED. Now it is ENFORCEABLE - both for the Seller's and for YOUR protection.
REJECTION: The Sellers reject your offer and accepts someone else's (typical in multiple contract situations).
COUNTER-OFFER: The Sellers acknowledge your offer but changes terms according to what they want. At this point you can either walk away (no expense, no responsibility), accept the Seller's counteroffer, or submit your own (second) counteroffer. This process can go on indefinitely until the "meeting of the minds" is attained. Sometimes it is just impossible and you may have to move on.
To negotiate a contract smartly, it is best to have the most information you can. Your REALTOR can many times get you:
Market comparables ("comps") showing how much similar homes in the area have sold for
How much did the Sellers pay for the home, when they purchased it, and what mortgages they have registered on it.
Other choices in the area of similar size, age, characteristics.
The Sellers' reason for selling, motivation and perceived urgency
This guide for first-time home buyers is intended to provide general information to help buyers be aware of the buying process, and to dispel any myths about buying a home. Please discuss your particular situation with the appropriate professionals before making any decisions.
So, You want to Buy a Home?
Since buying a home is a BIG financial commitment, many first-home buyers (and some repeat buyers) feel very intimidated by the whole process, which, in itself is rather uncomplicated, but it involves a lot of small steps, that, if not done right, can produce expensive mistakes.
In my 12 years in Real Estate I have dealt with many types of buyers and different scenarios, so I have developed a "method" to reduce stress and ensure success. Here's a brief synopsis of my recommended "Buying Process".
STEP 1 - Hire a REALTOR to Represent You In SC, buyers can hire their own Buyer's Agent, normally at no cost to them. Once you hire a REALTOR as your Buyer's Agent, this person has a FIDUCIARY responsibility to represent you and protect your best interests. Buying a home is a "joint project" between you and your REALTOR. Make sure you establish a mutually agreeable communication pattern and that you have clear expectations of each other's responsibilities.
STEP 2 - Show Me the Money Whether you are single and about to buy a home on your own, or (even more so) a couple with kids, money is always one of the crucial factors to explore upfront. Ask yourself these questions:
What's the total monthly payment that you would feel comfortable with, without stretching your finances or cramping your style?
Do you have an "emergency fund" in case there's a hiccup (loss of income, emergency, etc.)?
How much money do you have to put down toward the purchase?
Now, it's time to get PRE-APPROVED. Contact a local lender and they will be able to walk you through an application. The lending officer will review your INCOME, EXPENSES, ASSETS and LIABILITIES, plus your CREDIT SCORE. Based on a formula that takes into consideration several factors, the lender will tell you HOW MUCH is the maximum purchase price and loan amount you can have, the amount you must have ready for your down payment and your estimated MONTHLY PAYMENT.
Ask for a written PRE-APPROVAL letter and how long it is valid for. Keep in mind that (especially in this market) such a letter is often required by Sellers, and will give more weight to any offer you make.
STEP 3 - Define Your Needs and Wants Some buyers do not have a clear picture of what they want, and in a "buyer's market", where there are literally thousands of available homes, they can get confused and frustrated quite easily. I recommend that you write down your needs and wants, and rank them in priority, for example:
MY/OUR BUYING CRITERIA
NEED (must have): Min. 3-bedrooms, "excellent" rated schools, 2,000 sq. ft., under $200,000, within a 45-minute drive to/from work.
WANT (would like to have): Community pool, bonus (FROG) room, 2-car garage.
NOTE: If there is more than one decision maker, make sure you all agree on at least the NEEDS column. It is important that you share these criteria and priorities with your REALTOR, to help him/her give you better selection of properties and provide better advice.
Next: Part 2-Searching for a home and negotiating a contract....
On May 1st, Wells Fargo, one of the nation's largest mortgage lenders, decided to tighten its underwriting standards for 200 markets they considered as distressed or soft, requiring higher down payments and making state-income loans off limits in most of these markets. I believe this will cause other banks to follow suit (the bandwagon effect).
This is one more action that shows that the stimulus money provided by the Federal Government and intended to loosen up credit and provide funding to stabilize the real estate market is not working as intended. The government should have required the banks to lend this money out, instead of playing conservative and padding their balance sheets with it.
Regardless of what the government does, banks need to provide access to money to get the economy going. While tightening underwriting rules is a good long-term, safe strategy (which they should have done ten years ago - look at Canada!) their timing stinks and their strategy is not aligned with the consensus view that a real estate market recovery is the key to a swift economic recovery.
Fortunately, FHA-backed loans are providing some relief for lower-priced properties by guaranteeing mortgage loans of up to 97.5% of the purchase price. FHA loans went from "pariahs" to "superstars" in the last three years. Today, a big chunk of all the loans (that are actually closing) are FHA. Once again, it is the government who is taking the risk...
I hope that lenders understand that they also have a responsibility to loosen up their requirements in times of distress. I believe it is a measure of their corporate social responsibility commitment - the communities they operate in are also stakeholders, not only their shareholders. After all, it was their irresponsible behavior during the good times that got us in this mess.
As a first time home buyer, you need to maintain a balance between money and lifestyle in a way that makes sense for you and your family.
Buying a home comes with great benefits, but also with added responsibilities, one of the reasons many would-be first home buyers are very apprehensive and fearful of the process. They need not be. Although the process is not complex, it includes a myriad of steps that have to be done in the right order to avoid problems.
Hiring a REALTOR who can recommend the right team of inspectors, attorneys, lenders, surveyors, insurance agents, painters, handymen, etc. will save them lots of time and headaches.
I recommend to all my first-time home buyer clients that they follow a plan - like this one, for example:
Sit down (together with anyone involved in the decision-making process) and figure out your short, medium and long term objectives. What are your main reasons for buying? How long do you plan to stay there? How does buying a home fit in with the rest of your "life puzzle"?
Apply for a loan (make sure the loan officer checks all your documents) and get a pre-approval letter from a lender so that you know how much house you can comfortably afford. Make sure you can afford the estimated payment (i.e. no big payment shock!)
HIRE A REALTOR as your BUYER'S AGENT! It amazes me that someone who has never bought a home would feel OK about buying their biggest investment without getting professional help! In SC, hiring a REALTOR to represent you as a buyer is normally FREE OF CHARGE (the commission is paid for by the seller)
Establish your home search parameters (and share them with your Realtor!). Include: Location (the narrower the area, the better), price point, number of bedrooms/bathrooms/square feet, type of home, required condition, other features (like schools, fenced yard, pool, style, etc.)
Find the perfect home and (together with your Realtor) negotiate a favorable contract. Make sure the home, the neighborhood and the conditions contained in the contract fit your desires and objectives.
Stay actively involved during the due diligence (contract-to-closing) period, ask any questions you can think of (there are no silly questions!)
Make sure you provide any information/documents that your lender/insurance company/ attorney/Realtor asks for - without delay
Plan your move in advance. Connect utilities in your name as of the closing date
Ask the closing attorney how much you need to bring to the closing. Get a cashier's check or wire the money to the attorney. Review the closing statement (HUD-1) with your Realtor.
Attend the closing. Make sure all the terms of the sale and the loan(s) are what ou expected.
Change the address on your driver's licenses
Don't forget to apply for the Primary Residence Exemption - which will lower your property tax substantially!
Enjoy your home!
Read more articles like this one at www.BuyHomesInCharleston.com
A REVERSE MORTGAGE (RM) is a type of home equity loan that allows you to borrow against your home while still keeping title to it. It may be an ideal tool if you are a "house-rich, cash-poor" retired person.
Similarly to a "normal" (or forward) mortgage, your home is used as the collateral for the lender, except that in an RM the lender pays you (and adds the payment or draw, plus interest) to your balance.
There are three types of reverse mortgages:
FHA-insured
Lender-insured and
Uninsured
Borrowers can elect to receive a combination of monthly payments, lump sum or a line of equity against which they can draw whenever they need the money.
The benefit of a reverse mortgage is that it allows homeowners (62 and over) to keep living in their homes while using their equity for whatever purpose they choose. Borrowers may need the money to cover health care costs, pay off an existing debt, or support children or grandchildren.
Recently, the government allowed reverse mortgages to be used to purchase second homes (as downpayment).
When the homeowner moves out or passes away, their loan becomes due and their estate must pay it in full (the estate can either refinance to a forward mortgage to keep the home, pay with cash, or sell the home to pay the loan).
To qualify for a reverse mortgage, borrowers must have substantial equity in their home. The eligible amount is generally based on age, the owners' equity in their home, and the prevailing interest rate for the program. Because homeowners keep the title to their home, they are responsible for taxes, repairs, and maintenance. A real benefit of reverse mortgages is that borrowers can live in their homes as long as they like, even after they have completely exhausted their equity. Borrowers must also keep the home insured, and in good repair.
Reverse mortgage payments are non-taxable, nor they affect Social Security payments. However, interest is not tax deductible until borrowers pay off the debt.
Using a reverse mortgage reduces the amount of the borrowers' estate for their heirs (they are using up their net worth)
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
This is the last part of our brief guide for first-time home buyers in South Carolina. Once you have closed on the purchase of your home, you will still need to take care of some very important details (in addition to your move):
You have finished performing your Buyer's Due Diligence and everything's lined up for a closing on a specific date and time (usually at the attorney's office). What happens at this "closing"?
You found a home, negotiated a favorable contract ("ratified" = signed & delivered). You are supposed to close in 30 days. What now?
OK - so you've hired a REALTOR, discussed your needs and buying criteria and got preapproved by a lender. Now it's time to go see homes! Although it is a relatively small city, the Charleston Metro Area is very large, with hundreds of neighborhoods, areas and subdivisions each with a different style, construction, lot size and price point. 
This guide for first-time home buyers is intended to provide general information to help buyers be aware of the buying process, and to dispel any myths about buying a home. Please discuss your particular situation with the appropriate professionals before making any decisions.
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