Understanding the Process of Buying a House in Charlotte, NC
As a Realtor with a wide-ranging home buyer clientele, I often get questions about the process of buying a house in Charlotte, NC, from first-time home buyers to seasoned home-buying veterans. Many of my buyers are relocating to Charlotte NC from another state, and they don't completely understand the home buying process in NC!
I've broken down the home buying process into the following steps. If you follow these steps, and understand the process, then your experience in buying a home for sale in South Charlotte, NC will be much easier!
1. Find a good, experienced Realtor who is familiar with the area in which you are interested. Ask friends and family for references, and check them out. The seller has representation - you should too! In almost all cases, the seller pays the commission for the buyer broker, so buyer representation is FREE! Be loyal to your buyer broker - it's a two-way street!
2. Talk to an experienced mortgage lender and get PRE-APPROVED for a mortgage. This is critical - in today's strict lending environment, you need to know your purchasing power BEFORE you go out and look at homes. Your lender will help you find the mortgage product that is right for you. Virtually all sellers require a pre-approval letter with an offer to purchase - they want to know the buyer is serious! If you are paying cash, you will be asked to show proof of funds.
3. Research homes online - Ask your Realtor to set you up on a personalized MLS search, if available in your area. This search will include such parameters as price range, area, #bedrooms/baths, square footage, etc. All listings meeting your criteria will be sent to you in a private email from the MLS. Your Realtor may suggest neighborhoods you didn't even know existed. Here are some things to think about in your search:
- Schools - if schools are important to you, check out their ratings online and visit them in person during the school day. Even if you don't have school-aged children, recognize that good schools help drive property values.
- Commute time - if you will be commuting to work, do a test drive during rush hour.
- Neighborhood safety - check out crime statistics in neighborhoods you are considering. Visit your favorite neighborhoods in the evening and on the weekends to get a feel for it.
- Proximity to shopping and recreation - find out how close the nearest grocery, pharmacy, dry cleaner, department store, YMCA, or sports organization is to your target area.
- Market statistics - ask your Realtor to provide you with sales statistics for the neighborhoods you are interested in. Is that neighbhorhood market declining? stabilizing? rising? How much turnover?
- Distressed properties - If you are considering buying a short sale or a foreclosure, assess your tolerance for renovating/repairing homes that may or may not be in very good condition. If you are considering buying a short sale, understand that the process may take many, many months!
- Fixer-upper or move-in ready? If you are handy and have extra cash, now is the time to buy outdated, poorly maintained homes at a great price. However, if your cash flow will be compromised by your down payment/closing costs, maybe a fixer-upper isn't right for you.
4. Your Realtor will schedule showings for homes that meet your criteria.
This is the FUN part! Remember, this is a process of ruling out homes/neighborhoods as well as ruling IN neighborhoods. Try not to get distracted by the current owners "things," and envision how your family/furniture will "fit" in each house. Take careful notes!
You may think you won't forget the houses you see, but you will forget many details! Write down your reactions after leaving each home. Take photos of your favorite homes for view later.
5. Writing an offer to purchase! The long hunt is over, and you've found THE ONE! Your Realtor will provide you with comparables of recent sales in the neighborhood, and will help you determine a reasonable offer price. If you've found a home you love, now is NOT the time to offer an extreme low-ball - those days are over! Your offer has many important components, all of which are important to the seller: purchase price, amount of earnest money and due diligence fee, closing date and due diligence date, closing cost assistance (or not), and whether you are asking for personal property (refrigerator, washer & dryer, special furniture, pool equipment, etc.)
6. Negotiation process - Your Realtor will negotiate on your behalf to get the best purchase price and terms to suit your needs. There may be several counter offers on both sides until an agreement is reached. Your contract is not ratified until the last party signs the latest change on the contract and communicates back to the other party.
7. Due diligence period - Since January 2011 in North Carolina, the real estate purchase process has included a "due diligence period." This period of time (which is negotiable, but usually at least 30 days) is when the buyer does his due diligence: home inspection, termite inspection, appraisal, survey, mortgage application, etc. - anything that would help the buyer determine whether or not he/she wants to purchase the home. During this time, the buyer can walk away from the contract FOR ANY OR NO REASON AT ALL. This means you can simply change your mind - during the due diligence period - and get your earnest money deposit back. HOWEVER, there is a price the buyer must pay for having this much leverage, and it's called a due diligence fee. This negotiated sum of money is paid DIRECTLY to the seller, and the seller can cash the check right away. If the buyer goes through with the transaction, the due diligence fee is credited to the buyer. If the buyer walks away from the deal, the seller gets to keep the due diligence fee as compensation for having his home off the market.
8. Escrow period - After the buyer has completed his/her due diligence and is satisfied with mortgage approval, home inspection(s) and negotiated repairs, satisfactory appraisal and survey, the transaction is headed for the closing table with a NC real estate attorney. The attorney's office will examine the title for any defects, order title insurance, and prepare the HUD1 settlement statement with information provided by the lender, homeowners insurance agent, and title company.
9. Closing! This is the day you've waited for! The buyer(s) will attend the closing at the attorney's office, most often with the sellers in attendance as well. Buyers and sellers both sign the HUD1 settlement statement, the sellers sign over the deed, and typically leave at that point. The attorney then goes over all of the mortgage, deed of trust, title and other documents necessary to close the transaction. Once all signatures have been obtained, the attorney records the deed and the deed of trust at the register of deeds. The transaction is not considered "closed" until all documents have been recorded at the courthouse (just signing the documents at the attorney's office does not constitute "closing." Sellers are not required to hand over the keys to the house until recordation; however, many sellers do hand over the keys at the signing (settlement).
10. Moving time! Make sure to schedule your movers to allow for any potential delays at closing, and find out when you will get your keys - at settlement or recordation. Make sure to have all the utilities transferred to your name as of the day of closing. Your Realtor will be happy to provide you with lots of useful information to make transition to your new home/neighborhood a smooth one.
I hope you now have a better understanding of the process in buying a home in Charlotte, NC.
If you are planning to relocate to Charlotte, NC
and would like to buy a home for sale in South Charlotte, NC,
just give me a call and we'll chat about your needs and goals in your move. Remember, the seller has professional representation, and you should too! It's my goal to help you find the best home/neighborhood to fit your lifestyle and budget.